Mechanics of the program

The cash-for-clunkers program will continue at least through this weekend, and perhaps beyond. Here’s a Q&A; guide to how it works:

What’s the basic idea?

You trade in a used car and you get a new car with better gas mileage for a $3,500 or $4,500 discount. The federal government is funding the program.

Does the program apply to private transactions?

No. You have to go to a participating dealer.

Is the program retroactive?

Yes. Any qualifying car purchase that occurred on or after July 1 is eligible (if the government funds are still available).

Is there an age limit for the used car?

Yes. It must be less than 25 years old, based on the month and year it was manufactured.

How do I determine when it was manufactured?

Check the label attached to the frame or edge of the driver’s-side front door. (Open the door to see it.)


Is there a miles-per-gallon requirement on the used car?

Yes -- 18 mpg or less combined fuel economy when it was new.

How do I determine that?

Go to and look up the make, model and year of the car.

Does the used car have to be in drivable condition?


Is there a fuel economy requirement for the new car?

Yes -- it must get a combined 22 mpg or more.

How is the credit amount determined?

It’s based on the difference between the fuel economies of the trade-in and the new car.

If the new car gets at least 4 mpg but less than 10 mpg better than the used car, the credit will be $3,500.

If the difference is 10 mpg or more, you get $4,500.

Are SUVs, pickup trucks and work trucks included in the program?

Yes, but eligibility rules and credit calculations vary. See for details.

Can I get the credit in cash?

No. It must be used toward the purchase or lease of a new vehicle. If you lease, it has to be for at least five years.

Does the new car have to be U.S.-made?

No. Both domestic and foreign cars are eligible.

How expensive can the new car be?

Not more than $45,000 MSRP.

Is sales tax calculated on the full or on the after-credit price of the car?

The after-credit price.

Is the 1.15% state license fee based on the full or on the after-credit price?

Full price.

How many credits can I get?

One per person.

If you and your spouse co-own two cars, only one of the cars will be eligible for the program.

If you each own a car, then each car will be eligible.

Do you need to preregister?

No. Beware of sites that claim they can register you -- they could be trying to get your personal financial information for identity theft, the Federal Trade Commission warns.

What’s the official information site for consumers?

What’s the official name of the program?

Car Allowance Rebate System, although almost no one but government bureaucrats call it that.