Cash For Clunkers Program Pays

By: Andy Hodges
Published: Jun 29, 2009
Updated: Mar 18, 2010

Articles - Cash For Clunkers Program From July 1 To November 1, 2009

The Cash For Clunkers Program is designed to put consumers into new fuel efficient hybrid cars by crediting them with a cash voucher worth up to $4,500 for their clunker trade-in. However, consumers should understand that a new vehicle doesn't necessarily have to be a hybrid. The program only mentions that the new car has to be 2 mpg or greater than their trade-in.

For example, truck owners will get $3,500 for trading in and buying a new truck or SUV with 2 mpg more fuel efficient and $4,500 for one with at least 5 mpg better. Trucks qualify based on class and vehicle weight. The Ford F-150 would be considered a light-duty truck and does qualify.

Eligible vehicles must be manufactured in model-year 1984 or later. For work trucks, however, any model built before 2002 is eligible. Eligible vehicles are those that were made after 1984. Consumers should act fast as the program only provides a window of time from July 1 to November 1, 2009.

However, these cash vouchers will be eligible for redemption for up to two years after the date of issuance. In addition, no individual would be eligible to obtain more than one voucher in any three-year period. The individual must also own the car for a minimum of 1 year before using it as a trade-in.

The trade-in cars will then either be junked for parts or sold for export only. Critiques of the government incentive say it is another case to protect the auto industry. There are several environmentalists and lawmakers who claim the program will do further damage to the environment during recycling.

Personally, I beg to differ. The more gasoline cars we can remove from the roads, the more it will help the environment. The new cars, especially hybrid cars, will also help consumers save money at the pump.

Dealers Participation In Cash For Clunkers Program

According to the government incentive program, the dealers that except the trade-in's are eligible for a payment of $50 per vehicle. There are no EPA mileage measures for these vehicles, but the age requirement ensures that the trade will improve environmental quality. Dealers must ensure that the engine and transmission are crushed or shredded.

The engine, transmission and some other parts must be destroyed so they can't be reused. The idea is to cull fuel-thirsty, polluting drivetrains. We will offer more details of the Cash For Clunkers program in our upcoming Hybrid Cars Monthly Newsletter.