Cash for Clunkers Car Buying Stimulus Bill

For a list of vehicles eligible for the Cash for Clunkers rebate:

Click here to see eligible new vehicles you can purchase
Click here to see eligible used vehicles you can trade in

Cash for Clunkers — now officially known as the Car Allowance Rebate System (CARS) — is a federal program passed by Congress and signed into law by President Obama on June 24. The program is meant to encourage consumers to trade in older, less fuel-efficient vehicles for new vehicles that get better fuel economy by providing a credit worth up to $4,500. Modeled after several programs that have already been successfully implemented in Europe, the program is expected to begin on July 23 and end on November 1, 2009.

Though final details of the program are still being hashed out by the folks at the National Highway Traffic Safety Administration (NHTSA), below are details of the Cash for Clunkers program as we know them today. The program would offer a credit that allows consumers to save from $3,500 to $4,500 on a new-car purchase. There are also various credits for trucks and work trucks.

The program divides cars, trucks, SUVs and minivans into several categories, in most cases based on weight and size of the wheelbase. Vehicles that are traded in are to be crushed, not resold, and the sticker price of the replacement vehicle they purchase is not to exceed $45,000. Miles-per-gallon figures below refer to the EPA's "combined" mpg window sticker values.

Consumers should know that in cases where your used car is worth more than $4,500, this bill will probably not make financial sense for you.

Cash for Clunkers at a Glance

Do I Qualify for the CARS Program? What Are the Vehicle Requirements?
If my current vehicle is a...	Then the new vehicle I buy must be a ...	My new vehicle must get at least this mpg (combined)*	But also improve the mpg by...	The credit I can get is...
Passenger Automobile All passenger cars	Passenger Car	22mpg	4-9 mpg	$3,500
			10 mpg or more	$4,500
	Category 1 Truck	18mpg	2-4 mpg or more	$3,500
			5 mpg or more	$4,500
Category 1 Truck:† SUVs (Chevy Tahoe, Honda CR-V, etc.) with a GVWR of less than 10,000 pounds Pickups with a GVWR of less than 8,500 pounds and a wheelbase of 115 inches or less (Ford Ranger, Toyota Tacoma, etc.) Passenger vans and cargo vans with a GVWR of less than 8,500 pounds and wheelbase of 124 inches or less (Dodge Caravan, Toyota Sienna, etc.)	Passenger Car	22mpg	4-9 mpg	$3,500
			10 mpg or more	$4,500
	Category 1 Truck	18mpg	2-4 mpg	$3,500
			5 mpg or more	$4,500
Category 2 Truck:† Pickups with a GVWR of 8,500 pounds or less and a wheelbase greater than 115 inches (Ford F-150, Chevy Silverado, etc.). Passenger vans and cargo vans with a GVWR of 8,500 pounds or less and a wheelbase greater than 124 inches	Passenger Car	22mpg	4-9 mpg	$3,500
			10 mpg or more	$4,500
	Category 1 Truck	18mpg	2-4 mpg or more	$3,500
			5 mpg or more	$4,500
	Category 2 Truck	15mpg	1 mpg	$3,500
			2 mpg or more	$4,500
Category 3 Truck:† Trucks w/ GVWR 8,500-10,000 pounds that are either pickup trucks with cargo beds 72 inches or longer or very large cargo vans.	Category 2 Truck	NA‡	NA‡ However, the new vehicle must be similar in size or smaller than the trade-in	$3,500
	Category 3 Truck

Source: National Highway Traffic Safety Administration, Day One Notice
*MPG requirements are based on EPA's combined city/highway rating
†GVWR = Gross Vehicle Weight Rating
‡Not Applicable; Category 3 trucks do not have EPA MPG ratings

Basic Eligibility Requirements
Trade-in Vehicle	Is in drivable condition Has been both continuously insured, consistent with the laws of your State, and continuously registered to the same owner for at least one year immediately prior to the trading-in of your vehicle under the CARS program Manufactured less than 25 years before the date of trade in (i.e., before mid- to late-1984) and, in the case of category 3 trucks, not later than model year 2001 Has a combined MPG of 18 or less (this does not apply to category 3 trucks, i.e., very large pickup trucks and cargo vans)
New Vehicle (Purchased or Leased)	Is new (i.e., legal title has not been transferred to anyone) Has manufacturer's suggested retail price of $45,000 or less

Description of Vehicle Categories

Passenger cars: The old car you would like to trade in must have been manufactured in 1984 or later, and must get 18 mpg or less city/highway combined. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the credit will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the credit will be worth $4,500.

Category 1 Trucks: These are all SUVs (Chevy Tahoe, Toyota RAV4), minivans (Dodge Caravan) and small pickup trucks such as the Chevy Colorado and Toyota Tacoma. The old vehicle you would like to trade in must have been made in 1984 or later, owned, insured and operated by you for one year, and must get 18 mpg or less city/highway combined. If the mileage of the new vehicle is at least 2 mpg higher than the old vehicle, the credit will be worth $3,500. If the mileage of the new car is at least 5 mpg higher than the old vehicle, the credit will be worth $4,500.

Category 2 Truck: These are full-size pickup trucks such as the Ford F-150 and Toyota Tundra, and full-size vans such as the Ford Econoline. Versions of these trucks and vans that earn an EPA combined rating of 15 mpg or better are eligible for a credit. If the mileage of the new truck is at least 1 mpg higher than the old truck, the credit will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the credit will be worth $4,500.

Category 3 Truck: These are full-size heavy-duty work trucks such as the Ford F-350, F-450, etc. Under the agreement, consumers can trade in a pre-2002 work truck (any pickup truck or cargo van with a Gross Vehicle Weight Rating from 8,500-10,000 pounds) and receive a credit worth $3,500 for a new work truck in the same or smaller weight class. There will be a finite number of these credits, based on this vehicle class' market share. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also "trade down," receiving a $3,500 credit for trading in an older work truck and purchasing a smaller Category 2 truck weighing 8,500 pounds or less.