If you are wondering what the hell is cash for clunkers, then you are in the right place. First of all, let me give a short explanation about scrappage programs. These are programs of the government that aim to promote the scrapping of old vehicles. In return, these vehicles will be replaced by modern vehicles. Generally speaking, one of the main purposes of scrappage programs is the removal of vehicles with inefficient and high emissions and the promotion of cost-effective and resource saving vehicles.
The cash for clunkers is the scrappage program devised by the United States Congress. This is officially called the Consumer Assistance Recycle and Save Act of 2009. This is a one billion dollar program of the US government that will provide $3500-$4500 vouchers to car owners in order to help in offsetting the cost of new vehicle purchases over the next five months. The program is expected to run from July 1 to November 1, 2009.
So what are the cash for clunkers requirements?
- Trade in is allowed, but only for drivable vehicles that were made in the last 25 years. To set things clear, the cash for clunkers qualifying cars should be drivable and should be at most 25 years old. And by the way, the owner should have insured the car for at least one year prior to the trade in.
- Cash for clunkers qualifying cars should be consuming a minimum of one gallon of gas per 18 miles (18 MPG fuel economy).
- For the passenger cars, clunker qualifiers should have at least 22 MPG fuel economy. The owner will be entitled to a $3500 voucher if the new model has a 4 MPG improvement over the old vehicle. For the $4500 voucher, there should be 10 MPG improvement or more.
- For larger vehicles such as SUVâ€™s and trucks, the cash for clunkers qualifiers should have at least 18 MPG fuel economy. 2 MPG improvement over the old vehicles entitles the owner with a $3500 voucher while 5 MPG or more qualifies for the $4500 voucher.
- A new car should have a sticker price of $45000 or less in order for it to be a cash for clunker qualifier.
- For more information and updates about the cash for clunkers program, go to this website.
Update: The $1 Billion limit has been reached but the Congress has decided to extend it for another $2 Billion. That’s good news!