Cash for Clunkers Program Explained

What are the qualification requirements for the Cash for Clunkers program?

The Car Allowance Rebate System, commonly known as the “Cash For Clunkers” program, is an initiative set up by the federal government to get older, inefficient cars off the road, all while providing consumers incentives for purchasing a new and more environmentally friendly vehicle. Consumers could find that the cash incentives will save them thousands on a new car, which could result in lower costs overall for auto maintenance, gas and, possibly car insurance premiums. It’s up to each individual consumer to assess his/her personal benefits from the CARS program. This handy guide may be able to assist you in the process.

Car Allowance Rebate System (CARS) info

• CARS is a government-funded program estimated to cost $1 billion that is designed to give consumers incentives to purchase or lease environmentally friendly vehicles. Consumers will be asked to bring a fuel inefficient vehicle to a participating dealer, and in turn they will receive a credit/rebate on the costs of a new and more fuel efficient vehicle.
• The government hopes the program will boost sales of cars and trucks – not just vehicles produced by American manufacturers – all while increasing the number of safe and clean vehicles on the nation’s roads and highways.
• If eligible, consumers will receive a credit of either $3,500 or $4,500 from the purchase of their new vehicle. An individual dealer may also offer extra incentives, so it’s wise to shop around to secure the best possible purchasing situation. For example, you may want to find a car that will cost less to insure, or one that incorporates new safety features.
• The program is limited and will run from only July 1 through November 1 of 2009. If the $1 billion in funds runs out, the program will stop. It’s in your best interest to visit a dealership in person or online early to find out your eligibility. You will, however, be required to conduct the entire process at an in-person dealership. According to the U.S. Department of Transportation, only dealerships can participate in the CARS program.
• Not all vehicles will be eligible for the program. To find out if your car or truck is eligible you can visit your local dealership or check with the CARS program online through the U.S. Department of Transportation.
• Once your vehicle is accepted by the dealership, your car’s engine will be destroyed; the rest of the vehicle will be sold to a scrap yard for parts.

How do I know if I’m eligible?

While there are thousands of makes and models of vehicles on the road today, it can be difficult to narrow down simply exactly which vehicles are eligible. If you think your car might qualify, contact your local dealer of choice immediately. Not all dealers are required to participate, but most are choosing to be part of the CARS program because it will boost sales. As a rule of thumb, your car may be eligible if it meets these requirements:

• Vehicle is less than 25 years old.
• Vehicle gets less than 18 miles per gallon.
• Vehicles must have been continuously insured for the past year. You will be required to provide proof of car insurance coverage.
• Large trucks or SUVs may have different mileage requirements/specifications to be eligible.