Cash for Clunkers

1. What is the CARS (Car Allowance Rebate System) also known as Cash for Clunkers?
   "Cash for Clunkers," is a U.S. federal scrappage program intended to provide economic incentives to U.S. residents to purchase a new vehicle.
2. What is the goal of the CARS program?
   The CARS program provides incentives to owners of older, less fuel-efficient vehicles to trade them in and purchase new, more fuel-efficient ones. The program will benefit American consumers, stimulate showroom traffic and auto sales, and help to reduce fuel use and vehicle emissions. New vehicles are cleaner, more fuel efficient and have many safety technologies not available on older ones.
3. How does the CARS program work?
   An owner of a passenger car, minivan, SUV, or pick-up truck that gets an EPA combined 18 mpg or less can trade it in for a government electronic voucher good towards the purchase of a new vehicle. The amount of the voucher is either $3,500 or $4,500, depending on the mpg improvement of the new vehicle over the one it replaces.
4. What older vehicles are eligible for the program?
   The vehicle being traded in must be manufactured less than 25 years (built in 1984-2001) before the date of trade-in. The trade-in vehicle must have a combined (city/hwy.) fuel economy rating of 18 mpg or less.
5. What are some of the restrictions?
   The trade-in vehicle must be in drivable condition and have been continuously insured and registered to the same owner for the past year.
6. How can dealers and customers tell if a vehicle is eligible for trade-in under the program?
   National Highway Transportation Safety Administration (NHTSA) has launched the CARS website www.cars.gov. Currently there is minimal information on it, but eventually, there will be additional information available. In the meantime, consumers can check the combined fuel economy ratings of older vehicles on www.fueleconomy.gov to see if they may qualify. "Click on the Compare Side by Side" and select a model year and vehicle make to find the Combined EPA label figures for the given model. The correct mpg number is the one listed as "Estimated New EPA mpg."
7. Does the full amount of the voucher need to be used as down payment?
   No. The applicable voucher amount can be applied as a down-payment or partial payment towards a new vehicle.
8. Is there a price cap on the vehicles eligibility for purchase with the electronic voucher?
   Yes – the price cap on the vehicle is $45,000 (MSRP).
9. Is the value of the voucher tax-free to the consumer?Yes
10. Is there an income limit that disqualifies certain owners?No
11. What are the fuel economy requirements for the new vehicles?
    For Passenger Cars:
    • At least 22 mpg (combined) and
    • 4-9 mpg improvement over trade-in vehicle, $3,500
    • At least 10 mpg improvement over trade-in vehicle, $4,500
    
    For SUV's, Minivans and Light Duty Trucks (under 6,000 lbs)
    • At least 18 mpg (combined) and
    • 2-4 mpg improvement over trade-in vehicle, $3,500
    • At least 5 mpg improvement over trade-in vehicle, $4,500
12. How long will the program last?
    The program will be in effect through October 31st, 2009 or until the initial $3 billion in federal funding for the vouchers run out, whichever occurs first.
13. Will all dealers participate in the program?
    No. Dealerships are not required to participate.
14. Are lease vehicles included in the program?
    Vehicles may be leased using the voucher, but only if the lease term is 5 years or longer.
15. Does the dealer need to arrange for the vehicle to be scrapped?
    Yes, a dealer must transfer the vehicle (including the engine block) to a participating recycler or dismantler for disposal. A list of eligible disposal entities will be included in the regulations issued by the DOT. Dealers will have to certify the transfer of the trade-in vehicle to a participating entity and submit the VINs of the trade-in and new vehicle purchased.
16. What happens to the vehicle once it's transferred to a dismantler or recycler?
    The vehicle will be crushed or dismantled and not re-sold as a vehicle to a consumer. All of the vehicle may be recycled with the exception of the engine.
17. Can a consumer use vouchers in addition to the manufacturers rebates?
    Yes. Dealers must use the voucher in addition to any other rebate or discount advertised by the dealer or offered by the manufacturer.
18. Does the dealership retain all the funds from the recycler?
    No. The dealership will give you the best estimate of scrap value for your vehicle less $50.00. Please keep in mind, scrap value is approximately $50.00 per ton.
19. Can a consumer trade-in multiple clunkers?
    No. Only one voucher may be applied toward the purchase of a single vehicle.

Contact your dealership to see what vehicles apply and if you could qualify for the CARS (Car Allowance Rebate System) program.

All updates and additional information can be found on www.cars.gov or www.fueleconomy.gov websites.