Cash for Clunkers Car Buying Stimulus Program

Posted by Faizan Shiwani / at 12:46 PM / /

For a list of vehicles eligible for the Cash for Clunkers program:Click here to see new vehicles eligible for purchaseClick here to see used vehicles eligible for trade-in
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Cash for Clunkers — now officially known as the Car Allowance Rebate System (CARS) — is a federal program signed into law by President Obama on June 24, 2009. The Cash for Clunkers 2009 program is meant to encourage consumers to trade in older, less fuel-efficient vehicles for new vehicles that get better fuel economy by providing a credit of either $3,500 or $4,500.

There are also credits available for some very large vans, SUVs and pickup trucks irrespective of their fuel economy. Modeled after several programs that have already been successfully implemented in Europe, the Cash for Clunkers program covers qualifying transactions that occur between July 1 and November 1, 2009 (or until the funds allocated to the program are exhausted).

The National Highway Traffic Safety Administration (NHTSA) was tasked with hashing out the details and implementing the Cash for Clunkers program.

The program divides cars, trucks, SUVs and vans into four categories, in most cases based on weight and length of their wheelbase. Vehicles that are traded in are to be destroyed, not resold, and the base manufacturer's suggested retail price of the new replacement vehicle cannot exceed $45,000. Miles-per-gallon (mpg) figures set out below refer to the EPA's published "combined" mpg.

If you have a used vehicle you want to trade in that is worth more than $4,500, the Cash for Clunkers program will probably not make financial sense for you.

We recommend that you use our Cash for Clunkers calculator to evaluate whether you might want to take advantage of the program. You may also find it helpful to review the following chart in which we show, for each category of used vehicle, the mileage requirements to receive a credit (and the amount of the credit).