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Cash for Clunkers Program Details

The cash-for-clunkers program will give consumers a $3,500 or $4,500 rebate if they scrap older, less fuel-efficient vehicles, and purchase new, higher-mpg vehicles.

by on Jun.19, 2009

Duration of Program: Cash for Clunkers will be effective immediately upon enactment of the legislation (it is expected to be signed into law by President Obama in the next week). 
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Have we got a deal for you from the taxpayers.

However, it will probably take the U.S. Department of Transportation 30 days or so to issue the exact procedures and rules for implementing the program.  See the website.

If you look at the provisions below, the rules could be complicated. And, as always, the devil is in the details.

The program has been authorized to last for one year. However, Congress only funded it to last through 30 September  2009, the end of the fiscal year. Congress will need to provide additional additional funds to continue the program for the rest of the year specified. Given the controversy surrounding the 2010 budget, additional funds are by no means certain.

Trade-In Vehicles: Must be in drivable, continuously insured and registered to the same owner for at least one year. They must have an EPA combined city/highway fuel economy value of 18 mpg or less,  and not be more than 25 years old, except for work trucks, which must be pre-2002. Work truck mileage doesn’t matter.

New Vehicles: Must have a manufacturer’s suggested retail price of less than $45,000.

  • Passenger Cars: Must have an EPA combined city/highway mpg value of at least 22 mpg. If the mileage of the new car is at least four mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.
  • Small Trucks and SUVs: Must have an EPA combined city/highway mpg value of at least 18 mpg. If the mileage of the new truck or SUV is at least two mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least five mpg higher than the old vehicle, the voucher will be worth $4,500.
  • Large, Light-Duty Trucks: Applies to pickups and vans weighing between 6,000 and 8,500 pounds. Must have an EPA combined city/highway mpg value of at least 15 mpg. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.
  • Work Trucks: Applies to a pickup-up truck or cargo van weighing from 8,500 to 10,000 pounds. No mpg requirement for the trade-in or new vehicle applies. But the trade-in must be a pre-2002 work truck. The voucher for the new vehicle is worth $3,500. However, only 7.5% of the total funds in the program can be used for vouchers for the purchase of a work truck. Buyers can also “trade-down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a pick-up or van weighing between 6,000 and 8,500 lbs.

MPG Values: The mpg values are the EPA combined city/highway fuel economy as posted on the window sticker of new vehicles. These and can be found at fueleconomy.gov.