'Cash for Clunkers': Details on how it works
The $1 billion Car Allowance Rebate System, coined "Cash for Clunkers," was signed into law by President Obama on June 24 and is designed to increase both auto sales and the fuel efficiency of the nation's automobiles.
All qualifying transactions from July 1 to Nov. 1 are covered under the program, assuming designated funds don't run out before then.
What vehicles qualify?
Used cars that get fewer than 18 miles per gallon, were continuously registered and licensed for the past year with the title holder, and that are less than 25 years old and in driveable condition can be traded in for a new, more fuel efficient vehicle with a rebate under the program. Some large trucks and vans have different requirements.
How much is the rebate?
If the new vehicle gets 4 to 10 miles per gallon more than the trade-in, the rebate to the consumer will be $3,500. If it's more than 10 miles per gallon in improvement, the rebate will be $4,500.
What do I bring to the auto dealer?
For starters, your "clunker" to be traded in. It must have a vehicle manufacturer date -- normally found on the driver's door -- that is less than 25 years old. You will need proof of insurance and registration going back at least one year, and a clear title to the car in your name with no "liens or other encumbrances" attached. No voucher will be needed to receive the rebate, as the auto dealer will apply the credit at the time of the purchase.
What will happen to my "clunker"?
It will be crushed or shredded. Under the program, the trade-in vehicle must be destroyed to ensure that it will not be resold. While the entity crushing or shredding the vehicle can sell some individual parts, they cannot sell the engine or drive train. The rebate program requires auto dealers to provide an estimated value of the scrapped materials from the trade-in vehicle. The value will be taken off the price of the new vehicle in addition to the rebate.
Information from www.cars.gov