The government is offering a $4,500 credit to anyone willing to trade in their old clunker for a new fuel efficient car, but there’s a catch. Well, several catches…
To qualify, consumers must turn in a vehicle that is no more than 25 years old and has a combined city and highway fuel economy rating of no more than 18 miles per gallon, as calculated by the Environmental Protection Agency. The E.P.A. lists vehicles’ ratings at the Web site FuelEconomy.gov.
The old vehicle must be drivable, and it must have been insured by and registered to the same person for at least the last year, preventing shoppers from buying an old car and flipping it to get a discount on a new vehicle. The credit cannot be applied toward a used vehicle or toward new vehicles that cost more than $45,000.
To get the full $4,500 credit, consumers must buy either a new truck or sport utility vehicle that is rated at least five miles per gallon higher than the scrapped vehicle or a passenger car that is rated at least 10 miles per gallon higher than the scrapped vehicle. Because the old vehicle will be destroyed, the credit is given instead of the regular trade-in value – not in addition to it – though some dealers might compensate customers for the vehicle’s scrap value.
By contrast, programs in Europe practically boast “if you can haul it in, you get cash!”
According to one Texas dealer, a similarly restrictive state program helped sell only about an extra car each month. And, of course, domestic automakers manufacture only 8 of the 48 cars Consumer Reports recommends that are eligible under the program. Still, do you have an old jalopy you would consider dragging in for the credit?