Cash for Clunkers Facts

The Cash for Clunkers government program has been a much bigger success than anyone could have imagined. In this article, we take a look at Cash for Clunkers facts.

The Cash for Clunkers program was initiated by the federal government with a couple of goals in mind. The overall goal was to try to build up demand in the auto market to assist car companies that were losing money hand over foot in the “Great Recession.” With two of the big three American companies in bankruptcy, the program couldn’t come quick enough.

The second goal of the program was to get old, fuel inefficient, polluting cars off the road. New cars much meet much stricter fuel and emissions standards, so the theory was there would be a net benefit from switching out the older vehicles for newer ones. This has proved to be the case for the most part.

So, what Cash for Clunkers facts do we have? Let’s take a look:

• The credit amount is between $3,500 and $4,500 depending on a number of factors.
• The credit is $4,500 if the new car you are buying gets 10 miles to the gallon better than the old one.
• The credit is $3,500 if the new car gets between 4 and 10 miles to the gallon better than the clunker.
• If the new car gets less than 4 miles to the gallon better mileage, there is no credit.
• Trucks and SUV have their own particular categories and stages of credit amount.
• The dealer will apply a credit to the price of the new car you are buying.
• Clunkers must be less than 25 years old to be traded in.
• Clunkers must get 18 miles per gallon or less to qualify.
• You may only do one clunker trade in per person.
• Clunkers must have been registered and insured for a year by the person trading them in.
• The clunker traded in must be scrapped.
• The credit you receive is not taxable income to you.
• The credit is in addition to any rebates being offered by the car company.
• Because of the Cash for Clunkers program, Ford saw its first increase in sales in over a year.
• The value of the scrapped car [which is minimal] will be added to the rebate credit.
• You must buy or lease a new vehicle. You cannot buy or lease used vehicles.
• The program ends November 1, 2009.

The above Cash for Clunkers facts don’t really bear out how successful this program has been. The government has already had to add money to the program because so many people have taken advantage of the opportunity to trade in old clunkers for a brand new vehicle.

<< Back to Auto News