Cash for Clunkers Requirements

The US government outlined the Cash for Clunkers requirements in mid-2009, and the program started wrapping up in August 2009. In this program, the government allowed car owners to trade in older vehicles for newer, more fuel-efficient cars. Formally known as the Car Allowance Rebate System (CARS), the cash for clunkers program was initiated to jumpstart the lagging economy and rescue suffering car dealers. The program allowed car owners to get credit for an old car to be used toward the purchase price of a new one. However, not just any car qualified for the rebate program.

Requirements
In order for a car to qualify for the historic car allowance rebate program, several requirements needed to be met. The car had to be under 25 years old and fully insured and registered for the entire previous year. It also had to be registered with the same owner for that whole year. The vehicle had to be operable and meet certain weight requirements as well. Salvage vehicles were acceptable, as long as they met all the other CARS requirements. If a car did not meet the requirements, it would not be eligible for a voucher.

There were requirements for the new vehicle purchases as well. The price of the new car needed to retail for less than $45,000 and needed to be considered a fuel-efficient vehicle (22 miles per gallon). The vehicle also needed to be purchased from a participating auto dealership. The purchase had to be a new vehicle, not a used one. Buyers could also purchase either a foreign car or a domestic car.

Rebate
The way the rebate worked was that the federal government provided rebate money to dealers to provide credit for buyers for anywhere from $3,500 to $4,500. All dealers had to do was reduce the price of the new vehicle at the time of purchase by the credit amount. The dealer was then reimbursed that amount from the government.

Restrictions
Only one trade in CARS credit was issued per person and applied toward one new vehicle. Work trucks had different fuel efficiency requirements and were restricted to $3,500 rebates only. The CARS program ended in August 2009. As the economy continues to recover and the environment remains a major issue, you might want to brush up on the Cash for Clunkers requirements in case you get the chance to trade in your car again.