Next month, the government will start handing out credits of $3,500 or $4,500 to owners who trade in low-mpg cars for higher efficiency models under the Car Allowance Rebate System (CARS), popularly called the “Cash for Clunkers” program. Here are the basic things you need to know to determine whether it’s worth it to you—and how to protect yourself from scammers.
- Only certain low-mpg cars qualify.
To get the credit, the car you trade in must be less than 25 years old, and must get 18 MPG or less. It can be a foreign or domestic model. You can find your car’s fuel economy rating here.
- Certain trucks and vans will have different requirements.
Check out the chart on this Consumer Reports story on the CARS program for details on trucks and vans.
- The amount of the credit is based on the fuel efficiency difference between your trade in and the new vehicle.
To get the $3,500 credit, you must improve the fuel efficiency by at lest 4 MPG. To qualify for the $4,500 credit, the improvement has to be at least 10 MPG.
- The vehicle has to have been continuously insured and registered for a full year prior to trade in.
- The new vehicle price cannot exceed $45,000. And it has to be new, not used.
- By participating in the program, you will not receive the full normal trade-in value of your vehicle.
You will only get the scrap metal trade in value, because the program requires that all trade ins be destroyed. You should find out the trade in value of your vehicle before participating to make sure it’s worth it. Click here for a chart from Edmunds.com that shows which vehicles have trade in values that are lower than the credits (PDF).
- The program runs through November 1, 2009.
- The credit will be applied at the time of purchase.
There are no vouchers or forms—the dealer applies it when you buy or lease the new vehicle. The dealer then gets reimbursed by the government.
- There is no registration requirement or process.
As CNN points out, any place that tries to collect your private information in order to see whether you qualify is scamming you. Eligibility is based solely on the car requirements listed above.
- You can find a list of eligible dealers at the official government site, www.cars.gov.
That’s the only official site. They’ll list participating dealers there once the program kicks in. You can give them an email address and they’ll send you an update when they have more information available.
“Edmunds.com Provides List of Vehicles Eligible for “Cash for Clunkers” Rebate” [Edmunds.com]
“Beware ‘Cash for Clunkers’ scams” [CNN]