What is Cash for Clunkers?
Also known as "cash for clunkers", The Car Allowance Rebate System (CARS), was a U.S. federal program meant to entice U.S. residents to purchase a new and more fuel-efficient vehicle and trade in a less fuel-efficient vehicle.
This program was promoted as an economic stimulus by boosting auto sales, while at the same time putting cleaner, safer and more fuel-efficient cars on the road.
The program was officially started on July 1, 2009. It was met with an extreme high demand when it went public, and all the resources for this program were exhausted and then some. With an original budget of $1 billion, an additional $2 billion had to be approved, making this a $3 billion program.
Charitable organizations were very unhappy with the program. As a result, a decrease of 7.5% of car donations were reported the month the program went public, as they were instead traded in to the Car Allowance Rebate System.
Eligibility criteria for the program was:
- The vehicle being traded in must be less than 25 years old on the date being traded,
- And must have 18MPG or less (very large trucks or vans had different requirements).
- The vehicle being traded but have been registered and insured for the full year before the date of trade-in,
- And must be in driving condition.
- If trading in an eligible vehicle, that vehicle would be scrapped and the scrap value of that vehicle would be in addition to the rebate.
- The new car being purchased during your trade-in needed to be of no more than $45,000 suggested retail price.