Cash-for-clunker program: Is your car eligible?

This old Mercedes in front of a Carrollwood, Fla., restaurant made a great icon. But it would have to be operational to qualify for the cash-for-clunker program passed by the Senate Thursday.

The US government is poised to give Americans up to $4,500 toward the purchase of a new fuel-efficient car if they trade in their old clunker. The cash-for-clunker program, already popular in Europe, aims to boost car sales while getting the least environmentally friendly vehicles off the road.The program could start as early as July 1. Will your car qualify as a clunker?
The Senate, which passed the measure Thursday, must still reconcile its version to the already passed House bill and the president has to sign it (which he's indicated he will). But the broad outlines are already known. To be eligible, your clunker must be:

1) Operational.
2) Rated at no more than 18 miles per gallon (m.p.g.) combined city/highway. (Check your car's rating here.) (Editor’s update: The Environmental Protection Agency updated mileage ratings on July 24, affecting the eligibility of some models. These changes will only affect trade-ins made after that date.)
3) A 1984 model or newer.
4) Worth less than $4,500 – or in some cases, $3,500. (The program just bumps up the trade-in value of your car to one of those amounts; you don't get extra).
5) Owned by you for at least a year (so you can't go out and buy one at the junkyard and then turn around and trade it in).

The car or truck you buy or lease must be:

1) New. (It can be foreign or domestic).
2) Rated at 22 m.p.g. (combined) or better. If it's a car and gets at least 10 m.p.g. better than your old vehicle, you get a $4,500 voucher; otherwise, it's $3,500. For trucks, it's more complicated. (Click here for details.)
3) Be worth no more than $45,000.
4) Bought between July 1 and Nov. 1 (but Congress has the option of extending the $1 billion program if it comes up with more money).

That voucher comes on top of any car-dealer incentive. So if your dealer is offering $2,000 off a new car and you qualify for a $4,500 voucher, you've just cut the price of that dream ride by $6,500. If you confine your dream to a low-end model, "you can get a brand new car for under $6,000," says Brian Pasch, CEO of an automotive digital-marketing group in Rumson, N.J.

Interest in the idea is skyrocketing. Mr. Pasch last month set up to link potential clunker owners with car dealers. He says 50 dealers a day are linking to his site and on Thursday, it attracted 10,000 unique visitors.

For many Americans, next month may turn out to be a great time to buy a car.


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