Cash for Clunkers

Want to know more about the "Cash for Clunkers" program?

Trade-ins can get no more than 18 mpg, built in 1984 or later, owned and insured by the buyer for a year/more. Refer to the EPA's combined city-highway rating (check here for a guide).

Buyers get a $3,500 voucher for the old car getting at least 22 mpg. Voucher increases to $4,500 if the new car gets 10 mpg more than the trade-in. Buyers can use the voucher toward a 5-year lease. Vouchers are available for small/large light-duty trucks.

IRS E@lert notes the lack of means testing (higher earners aren't excluded). Dealers participating in the program will get voucher payments directly from the Department of Treasury. Vouchers will not be considered income, the traded-in vehicle can't be resold or used for parts, and the MSRP of the new vehicle can't exceed $45,000.