Last week, the Cash for Clunkers Program narrowly avoided being scrapped after its budget had been expended. However, congress and President Obama approved an additional $2 Billion dollars, so Cash for Clunkers could keep running until November.
This FAQ answers some of the frequently asked questions about the Cash for Clunkers Program, so you can take advantage of this incentive.
The Cash for Clunkers program is program offered by the government to provide an incentive to purchase a new car. The program provides up to $4,500 for traded in vehicles, providing they meet several requirements.
One of the main parts of the Cash for Clunkers Program is that the new vehicle purchased must have an improved gas mileage.
If there is a 4mpg increase $3,500 is offered for the trade in.
If there is a 10mpg increase, $4,500 is offered for the trade in.
No, participating dealers will do all the paper work and apply a credit towards the purchase of a new vehicle.
No, the car purchased must be a new vehicle.
The Trade In must have been manufactured within the last 25 years, have at most an 18mpg fuel rating, and be in running condition.
Yes, the trade in must have been insured and have held a valid registration for the last year.
Yes, you can trade in a car with a salvage title, providing it meets the other requirements.
Yes, work trucks can be traded in as part of the Cash for Clunkers Program. Work trucks do not have the same fuel efficency requirements, but must not be manufactured after 2001. Class 2 and Class 3 trucks are covered and must be traded in for a truck of similar size. $3,500 is offered for work trucks.
No, under the Cash for Clunkers Program, each household is only allowed one credit.
Yes, leased vehicles are covered.
No, if the dealer says you must sign an agreement repaying the credit if the Cash for Clunkers application is rejected, this is not true.
Vehicles that weigh over 8,500 pounds are classified as Class 3 vehicles and do not have a fuel rating set by the EPA. This is one way SUV Manufacturers managed to get around many of the fuel and emissions requirements set by the EPA.
As a result, a larger SUV, weighing over 8,500 pounds, is classified as a work vehicle and only eligible for a $3,500 credit. The SUV must also not have been manufactured after 2001.
The engine of the old car must be destroyed by the dealer, because the Cash for Clunkers Program is designed to take older innefficient vehicles off the road.
The other parts, however, are recycled and sold in scrap yards. This means that the transmission, body, and even mirrors can all be potentially reused. Of course, the engine is also recycled as scrap metal.