How “Cash For Clunkers” Works
As part of its overriding effort to jumpstart the American auto industry and revitalize the economy, the federal government has launched its “Cash For Clunker” program. The goal is to encourage purchases of new, more environmentally-friendly vehicles in exchange for old cars with low gas mileage. Many car manufacturers and dealers are taking advantage of the campaign to offer additional savings of their own, for people who participate in the program.
Here are the key elements of the program:
Trade-ins must be a 1984 model or newer, in running order, worth less than $4,500 ($3,500 for some models) and owned by the seller for at least year. The combined EPA miles per gallon rating must be 18 or lower.
New purchases or leases can be foreign or domestic makes, must be worth $45,000 or less and be purchased by November 1. (Congress reserves the right to extend the program beyond this date.) To qualify the new vehicle must average at least 22 mpg and the type of vehicle and difference between old and new ride determines the final amount of the voucher – up to $4,500. It should be noted that this government payout is in addition to any other incentives offered by the car dealer.
One final note – On July 24 the
Environmental Protection Agency revised its mpg ratings for dozens of vehicles. The net effect is that some cars that were formerly eligible for the program no longer are. Others that failed to qualify previously now do. To check the status of your vehicle, visit the EPA’s
Fuel Economy website
here.