Have you been hearing all the buzz about the Cash for Clunkers or Car Allowance Rebate System (CARS)?
“How would you like to trade in your old gas-guzzling clunker and get $3,500, or even $4,500 cash to buy a new one?”
Well, the cash for clunkers stimulus program does just that. Although, the jury is out on whether the program will actually help individuals, the auto-industry, or the environment. One thing is for certain, your tax dollars (approx. $1 Billion) are involved, so it’s a good idea to know the details.
Cash for Clunker Bill (now Car Allowance Rebate System)
The cash for clunkers legislation was signed into law by President Obama on June 25th, officially as the Car Allowance Rebate System (CARS) to be administered by the National Highway Traffic Safety Administration of the U.S. Dept. of Transportation. Here’s a pdf of the C.A.R.S. Law.
Cash for Clunkers / CARS Details
Essentially, you trade in your less fuel efficient vehicle and get a credit towards a new, more fuel efficient vehicle. Key points to note:
- Rebates range from $3,500 to $4,500, depending on the type of vehicle you trade in.
- The vehicle you are trading in must be less than 25 years old on the date of trade in.
- It has to be a new vehicle you are buying or leasing.
- Both vehicles can be either domestic or foreign.
- Your trade-in (clunker) must get 18 or less MPG (with the exception of some vehicles)
- You must have owned, registered, and insured your trade-in (clunker) for more than a year.
- The dealer you buy the new car from will handle all of the details.
- The Cash for Clunkers program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.
- Your trade-in (clunker) will be destroyed. So, the dealer will only give you scrap value for it, above and beyond the CARS credit.
How to Apply for the Cash for Clunkers / CARS Program
The cars.gov website makes it fairly easy to understand how the Cash for Clunkers / CARS program actually works. They detail the process in the chart:
- You’ll first need to visit cars.gov for information on the program. I guess this is here so they don’t have any unqualified folks applying to the program.
- Your next step is to find your car.
- Once you have your new car picked out, bring the paperwork showing you’ve had the clunker (to be traded in) for at least one year. This includes the title, registration, and insurance.
- The dealer will then handle the submission of the paperwork to NHTSA.
- NHTSA will then review your paperwork and ensure the purchase meets the Cash for Clunker program requirements.
- Lastly, 10 days after you turn in your paperwork, the NHTSA will issue a credit to the dealer. This being the case, the dealer will likely sell you the new car and make the trade prior to getting full approval, giving you the credit before they receive it.
Who to Contact for More Info
If you’d like to know more about the program, be sure and visit the website at www.cars.gov, or call the hotline at (866)-CAR-7891.
About Philip Taylor
Hi, I'm Philip Taylor. I'm a husband, father, blogger, and entrepreneur. I love learning to do more with my money and sharing it all here with you. Join in on the conversation and start improving your financial life today.