Cash for Clunkers Facts

What is the Car Allowance Rebate System?

The CAR Allowance Rebate System (CARS) is a $1 billion government program that helps consumers buy or lease a more environmentally-friendly vehicle from a participating dealer when they trade in a less fuel-efficient car or truck. The program is designed to energize the economy; boost auto sales and put safer, cleaner and more fuel-efficient vehicles on the nation's roadways.

Consumers will be able to take advantage of this program and receive a $3,500 or $4,500 discount from the car dealer when they trade in their old vehicle and purchase or lease a new one. Consumers you do not need to register anywhere or at anytime for this program. However, to find out eligibility requirements click here.

What is NHTSA doing to guard against fraud? Click here for more information. Allegations of fraud may be reported by calling our toll-free 24-hour hotline at 1-800-424-9071.

Important Things to Know

  • The CARS credits of $3,500 or $4,500 are for new car purchases.  New as defined by the laws in your state which normally means that it has never been titled.  The new car can be a 2008, 2009 or 2010 model.
  • Car purchases that qualify for the voucher have to be between July 1, 2009 and November 1, 2009.  Cars purchased or traded in before July 1, 2009 do not qualify.
  • If your vehicle is worth more than $4,500 there is no incentive to particpate in the CARS program.  You can trade in your vehicle and apply factory rebates and credits.
  • You will not get a CARS credit plus trade-in value because the car will be sent to the scrapyard.  Your CARS credit of $3,500 or $4,500 is your total trade-in credit.
  • You can purchase or finance a car with your trade-in.  If you decide to lease a car the lease term has to be 60 months or higher.
  • You can not trade in a motorcycle or purchase a motorcycle in the CARS program.
  • You must be able to drive your trade-in to the dealer where you are buying the new car.
  • The CARS credit is not taxable to consumers.
  • There are no income limits on who can purchase and qualify for a voucher.
  • The new car you purchase can not have an MSRP over $45,000.
  • You can not trade in two clunkers for the purchase of one new car.
  • The EPA Combined MPG may not reflect what you experience due to the condition of your car BUT that is the only guide that car dealers can use.  Car dealers can not test your actual MPG ratings.  Your actual mpg has no determination on your ability to qualify for the CARS program.
  • Since monies for the CARS program are limited do not plan that the program will last until November 1st without additional funding so act quickly, if you can.
  • Consumers will complete the entire transaction at the new car dealership and do not need to apply or regsiter online in advance.
  • The amout of your voucher ($3,500 or $4,500) will be determined at the dealership where you are purchasing a new car based on Federal MPG guidelines and the car you want to purchase.  If you are unsure, contact a local dealer with your questions
  • Your trade-in can not be more than 25 years old.
  • Dealers will be registering for the program on Friday July 24, 2009.  Please give them the benefit of the doubt as they get up to speed on the program rules as quickly as possible.
  • If your car is not listed on the NHTSA website, speak with your local dealer about qualifying your car after July 24, 2009.

Keep in mind that the ONLY official website for Car Allowance Rebate System (CARS) rules is and that website is operated by the NHTSA.  The NHTSA website is the only official place to get rules that all car dealers will be using when you bring in your car for a trade-in.

  Manufacturer rebates or incentives can be combined with your CARS credits

Links to dealers