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Driving Economically

Cash For Clunkers? The Car Allowance Rebate System

Cash for Clunkers or (CARS) is a government funded billion dollar program hoping to help stimulate the economy and get some cleaner running cars on the road. You may be eligible for $3500.00 to $4500.00 dollars towards the purchase or lease of a new vehicle.

What is the Car Allowance Rebate System?

The President has enacted a program called The Car Allowance Rebate System (Known as CARS)...most of us call it Cash for Clunkers. The government will allow a rebate towards the purchase of a new car or lease, when you trade in an older, and most likely less fuel efficient vehicle.

Cash for Clunkers or CARS Explained

The Cash for Clunkers or Car Allowance Rebate System (CARS) is a government program that will help drivers drive or lease a vehicle that is environmentally friendly. There are certain dealers who will participate in this rebate system or Cars for Clunkers as it is commonly called.

This is a $1 billion dollar program that will not only put cleaner, more fuel efficient cars on the road, it will help to stimulate and energize our economy. Consumers will be able to trade in their older, less efficient gas guzzling vehicles for brand new models that are more economical to drive and are friendly to our environment.

Who is Eligible?

Each consumer who is eligible for a rebate will get anywhere from $3500.00 to $4500.00 in the form of a discount from the dealer when they trade in their clunker for a new model. This rebate system is not for everyone. To find out if you are eligible go to

Here's a quick run down of the Cash for Clunkers program:
  • Your vehicle must be less than 25 years old on the trade-in date and it must get less than 18 miles to the gallon. (Truck mph is different.)

  • Only purchase or lease of new vehicles qualify

  • Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)

  • Trade-in vehicles must be registered and insured continuously for a full year preceding the trade-in

  • You don't need a voucher, dealers will apply a credit at purchase

  • Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.

  • The program requires the scrapping of your eligible trade-in vehicle, and that the dealer discloses to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

What Should I Bring to the Dealer?

These are the items you should bring to your car dealer to qualify for the Cash for Clunkers or The Car Allowance Rebate System (CARS)
  • Proof of Insurance for 1 entire year. If your insurance card will expire before a year after the date of the trade, you will have to ask your insurance agency for evidence of at least 1 full years worth of insurance. The form from your insurance company must include the insurance company name, your auto insurance policy, your car's VIN number, The beginning and ending date of insurance coverage for at least one full year

  • You must have proof of your vehicles registration and it must go back at least 1 year.

  • Your vehicle must have a "Clear" title. You cannot have any liens or other encumbrances, if you do they must be cleared before you go to the car dealer. You must also then, show evidence that there is no lien on the vehicle or your title must be signed and stamped.

  • The vehicle must not be over 25 years old according to the vehicle manufacturers date that can be found on the driver's door or door jamb.

  • If you cannot produce the above documentation there is still a process to help you take advantage of the Cash for Clunkers program (The Car Allowance Rebate System (CARS)) These include:

    • Evidence from your insurance company that you have at least 1 years worth of insurance on the vehicle you want to trade in.
    • You will have to contact the DMW in your area and get copies of past registration certificates to prove that you have owned the trade in vehicle for at least one year prior to the trade.
    • The registration must be in the same name as the vehicle's title, and they both must be in the same name as the new car buyer.
    • Clear your title if needed, by paying off any outstanding loans and get a newly issued title at the DMW that is free of liens or encumbrances, or have the lien release document from the actual lien holder. It also must be signed and stamped to prove the clearing of the lien, or you must have your title signed and stamped to prove it is cleared.
    • The dealer will ask you to certify the following under the penalty of law, that the above documents and paper work will prove to the dealer and he will verify the certification process.

  • Is My Trade-in Eligible?

    Your trade-in is eligible if:
    • The vehicle is in drivable condition
    • The vehicle is registered under your name and you have owned the vehicle for one year or more.
    • The vehicle has been insured continuously for at least 1 year from this day's date.
    • The trade-in vehicle is titled in your name and has been for the last year.
    • You have not participated in the Cash for Clunkers (CARS) program before.

    To find out more about Cash for Clunkers go to or contact an eligible dealer in your area. This information is from

    Updated: 4-25-2014 We have discovered that the website has been removed. So we have removed the link to the program, but will leave the article up because it shows a good reflection on the program details that where offered, whether you agree or disagree the program.

    CARS Program Officially Ended

    This was the Official message on the National Highway Traffic Safety Administrations (NHTSA) website.

    "CARS Program Officially Ended

    The CARS Program was officially shut down on September 30, 2011. All administrative and enforcement actions performed by the CARS Compliance Division are now unavailable.

    Active enforcement actions were transferred to the applicable Federal and/or State law enforcement agencies, and any future CARS enforcement actions will be handled by these entities.

    The website was taken offline in January 2012." ~ (NHTSA)

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