How to Cash in Your Clunker

Here's how to claim up to $4500 on your trade-in.

by on Jul.15, 2009

You may qualify for up to $4500 in federal dollars if you qualify for the new CARS program - also known as Cash-for-Clunkers.

You may qualify for up to $4500 in federal dollars if you qualify for the new CARS program - also known as Cash-for-Clunkers.

We’ve reported frequently on the Cash-for-Clunkers program, in recent months.  More formally known as the Car Allowance Rebate System, it’s loosely modeled after programs that have popped up around the world, effectively spurring sluggish demand for new automobiles.

The version finally passed by Congress is significantly different from what was considered in earlier proposals, leading to plenty of confusion among American consumers – as I’ve personally discovered during several recent radio talk show appearances.

Interest Free!

Interest Free!

The key difference is that the program that lawmakers approved no longer puts an emphasis on domestically-produced vehicles, and it really no longer is a bill designed to get older clunkers off the road.  Just about any vehicle less than 25 years old will qualify.  The emphasis, however, is still on fuel efficiency.  The idea is to get motorists to trade-in on more fuel-efficient products.  In fact, the better the mileage, the better the cash, as there are now two levels of credit, $3500 and $4500, buyers could qualify for.

Here are some fundamental bullet points to keep in mind if you’re thinking of taking advantage of the CARS program:

* Your vehicle must be less than 25 years old on the trade-in date

* Only purchase or lease of new vehicles qualify

* Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)

* Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in

* You don’t need a voucher, dealers will apply a credit at purchase

* Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.

* The program requires the disposal of your eligible trade-in vehicle and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

Want more information?  Click here, or open up another browser window and head to CARS.gov.

How do you feel about the cash-for-clunkers program?  Do you think it will work?  An will you personally take advantage of it, buying a high-mileage new vehicle?

*EPA Combined MPG, **under 6,000 lbs, ***6,000lbs - 8,500 lbs, ****8,500 - 10,000 lbs

*EPA Combined MPG, **under 6,000 lbs, ***6,000lbs - 8,500 lbs, ****8,500 - 10,000 lbs

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3 Responses to “How to Cash in Your Clunker”

  1. Rob says:

    You are wrong to say “Just about any vehicle less than 25 years old will qualify.” The 18mpg qualifier excludes a lot of auto models and you need to check on the cars.gov website for the list of qualifying models.

    I’m also hearing that some dealers charge additional “clunker” fees to dispose of the trade-in.

  2. Bryan Morris says:

    Generally, I think this is a great program. It has three benefits: it stimulates the economy, it increases the overall fuel economy of cars in use, and it actually provides a significant monetary benefit to the average person. You could argue about the details of mileage, vehicle age, or rebate amount, but the main thing I would change about it would be to require the newly purchased vehicle to have a certain percentage of domestic content and be assembled in the U.S. But that’s just me.

  3. Bill Tedesco says:

    I’ve been in with my dealer and I have my beautiful black on black Pontiac G6 GT just waiting. With my GM discounts and the $4500, I’ll have about $10,000 to put down.

    If the fed are so serious about improving fuel economy why not give consumers (the real people who drive the economy)an open-ended program for a few years until the auto industry is back from the dead?

    Why bail out the banks and corporations with billions and not throw the taxpayers a few million crumbs. Whose money is it anyway?

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