CARS- Cash for Clunkers Bill $3500 $4500 Junk car rebate

2009 Cash for Clunkers bill

updated: Aug 2009 CARS stands for Car Allowance Rebate System. CARS or Cash for Clunkers is a program introduced by the Obama government to encourage people to buy fuel efficient cars. If you are planning to buy a new car, you could trade your old car and get a rebate or discount voucher of $3500 or $4500 depending on criterion which are explained below.
$3500 or $4500 Junk Car Rebate in Cash for ClunkersYes, its possible to get $4500 rebate even if your old car is absolutely a junk car!. In fact the more junk (fuel inefficient) it is, the better your chances of qualifying for $4500 instead of $3500 rebate. Cash for Clunkers program can be used in addition to Auto Stimulus in Obama's stimulus package and also in addition to the Hybrid Car Tax Credit if applicable. The word Clunkers is used for Old fuel inefficient cars or junk cars and the precise definition is given below. Read the three eligibility criterion and 5 frequently asked questions given below in order to understand the benefits and details of cash for clunkers program.

Cash for Clunkers

Cash for Clunkers Details: Are you eligible?

In order to be eligible to get the $3500 or $4500 discount in Cash for Clunkers program the following must be applicable to you.
  1. Eligibility requirement for your Old Car : Your Old junk Car (or Clunker) must be made in the last 25 years (or after 1984 to be precise). The trade in car must not have a fuel economy rate or mileage of more than 18 mpg (miles per gallon).
  2. Eligibility requirement for New Car : The New Car must have a price tag of at most $45,000. If the new car being purchased is more than this value, you are not eligible for the Cash for Clunkers program. Also the new car being purchased must have a fuel economy rating of at least 22 mpg (miles per gallon).
  3. $3500 or $4500 cash rebate for clunkers ? : If both the above criterion are satisfied you will get a $3500 rebate as a cash discount for your clunkers or Old trade in Car. In the situation if the new car being purchased has a fuel economy rating of more than 10 mpg than your old car, you will be eligible for $4500 rebate for your junk car or clunkers.

Five additional FAQ on US Cash Clunkers 2009

  1. Where can you find fuel ratings of your old and New car? Go to
  2. Till when is this program valid? The Cash for Clunkers program is supposed to run from July 1 to November 1 2009. But the Government alloted $1 billion for the Cash for Clunkers program. This program may end sooner once this money is exhausted (unless the Congress decides to extend the program). $1 billion is good for 250,000 vouchers. i.e. in order to benefit from trading your clunkers you must be one of the first 250,000 people. update: The Senate has announced a further $2 billion extension of Cash for clunkers Program. Read more about Cash For Clunkers Extension. Note that Cash for Clunkers has already generated $920 million in junk car rebates and 220,000 in Auto Sales. This indicates that the new funds are likely to last at least through September 2009 or more.
  3. Are there any income limits to qualify for Cash for clunkers program? There do not seem to be any income limits to be eligible for this program. You can find more information on
  4. Is the discount voucher of $3500 or $4500 in addition to the trading price of your old car? Note that your Old car will be destroyed. So you will not get any value for your old Clunkers in addition to the discount voucher you get as per Cash for Clunkers Program. However some dealers may compensate you for the scrap metal generated from your car.
  5. Where can you find more info about Cash for Clunkers?

My Opinion on Cash Clunkers Incentive or Junk Car Rebate

In my opinion, the Cash for Clunkers program 2009 is a great idea which is poorly executed. This idea of rebate for junk car would have been more effective if the eligibility or qualification criterion for the new car would have been stricter, say for example only new cars with mileage of over 30 mpg are eligible (example hybrid cars like Toyota Prius). However from the car buyers point of view, this is a great opportunity. How many times do you get a $4500 rebate for your junk car? Please take a moment to share your thoughts and ideas in a comment.

Federal Tax Breaks, IRS Tax Credits, Tax Rebates in 2009 Economic Stimulus Package that maybe of interest to you

  • 2009 Obama Stimulus Package details explained.
  • New Car Purchase Auto Stimulus details explained- Excise and Sales Tax deduction for new purchase of new vehicles.
  • Cars- Cash for Clunkers - Car tax credit when you trade your old fuel inefficient junk car for a new automobile and get a cash rebate of $3500 or $4500.
  • $8000 First Time Home Buyer Tax Credit details- 2009 Housing Stimulus Bill in Economic Plan proposed by Obama.
  • $800 Making work pay tax credit stimulus- details explained ($400 working tax credit for individuals and $800 tax credit for married taxpayers).
  • $250 Social Security Stimulus Check in 2009 Economic Stimulus Package.
  • 2009 Cobra Stimulus Package 65% Reduction in Cobra Health Insurance Premium for qualifying individuals.
  • 2009 Stimulus Checks? Economic Stimulus Payment
  • $1000 Child Tax Credit, Dependent Tax Credit 2009 extension.

  • Jul 1, 2009


    Investo Blog July 23, 2009 at 7:47 PM  

    Search the web for car dealers
    Cash Clunkers Michigan: Search for car dealers in Michigan

    Cash Clunkers Washington: Search for car dealers in Washington

    Cash Clunkers Minnesota: Search for car dealers in Minnesota

    Cash Clunkers Illinois: Search for car dealers in Illinois


    Search the web for car dealers in your state

    John July 27, 2009 at 9:27 PM  

    Could you buy a clunker off the classifieds for a few hundred bucks and then trade it in for a new car and get the rebate? I don't have a clunker to trade in, but if I could take advantage of it in this way, why not!?!

    Investo Blog July 27, 2009 at 11:14 PM  

    I am not aware of any IRS ruling which will stop you from doing that. However, should I find any modifications or additions to this Cash for Clunkers Bill like your Clunkers must be bought at least one year ago etc. then I will update this post accordingly.

    Rick July 30, 2009 at 4:01 PM  

    I think the rebate should be wider. I am penalized for already being energy conscious, for driving a "junk" car - a 1994 Volvo that gets 20 mpg which is not included in the program. The criteria should have been a difference between old car and new car MPG, not just cars that get less than 18MPG.

    Anonymous August 11, 2009 at 1:08 AM  

    Like the last poster said, the program requirements should be relative to the MPG spread (ie. MPG difference between the trade in and the new car), and not an 18 MPG maximum on your trade in. I have a "clunker"(Kia sephia) that gets 22 MPG and I'd like to trade it in for a 35-40 MPG car, but I'm disqualified!

    Anonymous July 5, 2010 at 10:02 PM  

    Is it possible to get the congress to make another auto stimulus?

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