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Cash for Clunkers Program: How it Works
Jun 19 2009 by Jennifer Newman
If you’ve been on the fence about buying a new car, the government’s Cash for Clunkers program could be just the push you need. The program will use $3,500-$4,500 credits to encourage people to trade in their older-model cars for more fuel-efficient new cars.
The program is to begin sometime in July and end Nov. 1 or when the funding runs out. Under Cash for Clunkers, a passenger car excludes vehicles that weigh more than 6,000 pounds; a truck is defined as including “sport utility vehicles, small and medium pickup trucks, and small and medium passenger and cargo vans.” It’s unclear where some vehicles—car-based SUVs and minivans—fall in the Cash for Clunkers program. The government plans to release a list of qualifying vehicles soon, and we’ll let you know as soon as we know more details about the program.
What’s Eligible to Trade In?
• Passenger cars: Cars with a combined mileage rating of 18 mpg or less are eligible for the program. To find any vehicle’s combined mileage rating, go to FuelEconomy.gov.
• Trucks: Vehicles with a combined mileage rating of 18 mpg or less are eligible.
• Caveats: The trade-in must be drivable and must be a 1984-model-year or newer vehicle. Also, you must have owned and insured the trade-in vehicle for the past year before trading it in.
If You’re Buying a…
• Passenger car: If you’re buying a new car under the Cash for Clunkers program, it must get combined mileage of at least 22 mpg. To receive a $3,500 credit, the new car must also get 4 mpg better than the trade-in vehicle, which can be a car, SUV, pickup or minivan. To get the $4,500 credit, the new car must get 10 mpg more than the trade-in vehicle.
• Truck: To buy a truck under the program, the new vehicle must get a combined mileage of at least 18 mpg. To receive a $3,500 credit, the new vehicle also must get 2 mpg higher than the combined mileage of the trade-in. For a $4,500 credit, the new vehicle must get 5 mpg higher than the trade-in.
• Caveats: The credit will be applied to the purchase or lease of the new vehicle, which must have an MSRP of less than $45,000. Only one credit will be issued per person, and only one credit will be given to joint registered owners of a vehicle.
• Other offers: The credit can be combined with dealer incentives and tax credits.
Will the Cash for Clunkers program spur you to buy a new car? Tell us in the comments section below.
User Comments
This should be for AMERICAN new cars only
so this rewards the idiots who bought 4 mpg cars??? Thanks Obimbo for punishing me for buying a honda accord and keeping it running for 12 years. I’m going on craigslist to buy a crappy SUV so I can get a voucher.
Yeah good idea Mark…. Too bad under caveats it says you must have owned the car for over a YEAR, CL won’t help ya there. I do think this is pretty crappy though, I’d sure like to trade in my 92 civic that puts out as much in emissions as my uncles ‘05 hummer haha.
YES, as long as the dealers leave their original incentives inplace. It would really tick me off if all we end up doing is replacing a dealers incentive with one paid for by the taxpayer
Doc
Absolutely not, another stupid idea, if they want to help the failing Auto industry open it up to all older trade ins.
This 18 mpg is so stupid, They really do not want to help.
This will limit the new car purchases to a very select few.
It might. I drive a 2000 minivan with 150K miles and need all the help I can get to switch to something better on gas.
Minivans won’t be applicable because there aren’t any readily available on the market that get the minimum EPA combined 22 MPG rating. There is only one minivan, the 2009 Mazda 5, but its rear passenger area is smaller than other models. So if you wanted to buy a new Town & Country minivan, you’re SOL. This is totally disingenuous to the disabled population that HAVE to use a van for transporting a wheelchair user with the use of a lift or ramp.
I own a Mazda 5 and am a paraplegic. I had the people who put my hand controls in take out the 2nd row seats. Now I can transfer to the drivers seat and turn my chair around and then pull it right into the van in about 2 seconds. The Mazda 5 is by far the most wheelchair friendly car on the market. Get the word out!
This bill does not help poor people in the least. I think the upper middle class is the target for this plan. It might keep some factory workers in business a little longer, till they can retool for more efficiant models. This is a slight boost for the economy. Besides doing something to keep FORD and GM in business is better than doing nothing, right:) THIS IS AMERICA! The thing that erks me is the cars going to scrap are better than the ones I’m driving and I can’t aford a new one. Any thoughts on this. Isn’t there a better way? Please reply.
Just another thought. How about another program, POS’s for clunkers. I trade in my POS that has been insured in the last 5 years and has been broke down more than its been running and if any more rust falls off of it I’ll have to retitle it. Please give me a chance to buy a fare running used vehicle that gets 18 mpg and trade in my 14 mpg rust bucket. Thanks
Nope. I drive a 1999 Honda CRV with 140k. I get pretty good gas mileage so it appears I am ineligible.
It would have been nice if the legislation would have allowed for vehicles that are simply old.
It has proven to be quite a durable car, so there is no incentive to get rid of it. I have a father-in-law with a 1999 Chevy Astro van that is eligible, but he is to cheap to replace it.