Money for your gas guzzler
The 'Cash for Clunkers' bill just passed the House. Here's how it could help you trade in your older car for a new, fuel-efficient model.
NEW YORK (CNNMoney.com) -- Uncle Sam wants to put you in a new car. A so-called "Cash for Clunkers" bill -- just passed the House. It provides money to trade in that gas guzzler for a new, more fuel-efficient car. Here are the details.
The program would offer vouchers that allow consumers to save up to $4,500 on a new-car purchase. There are also various credits, for trucks and work trucks.
The bill will now head to the Senate where it will be debated.
Here are some of the requirements according to the House version of the bill:
- The old car that you want to trade in must get 18 miles per gallon or less city/highway combined.
- The new car must get at least 22 miles per gallon city/highway combined.
- The vehicle you trade in must be registered and insured under your name and in use for at least one year.
- The car that you purchase must cost $45,000 or less according to Edmunds.com.
There are exemptions though. However, cars that have not been insured for the past year or those that are older than 25 years are not eligible to be traded in for vouchers. And these eligibility requirements vary depending on whether you're getting vouchers for a light duty truck or a work truck.
One of the biggest criticisms is that it's not very environmentally friendly. Getting 22 miles per gallon isn't exactly a gas-sipping car. Secondly, not a lot of cars will qualify for the trade in. Let's take a look at what kinds of cars would be eligible according to Edmunds.com:
- 1990 Cadillac DeVille
- 1991 Dodge Grand Caravan
- 1990 Dodge Ramcharger
- 2004 Chevy Tahoe
Plus, the types of people who are driving cars that are at least two decades old, aren't necessarily the types of people who can go out and purchase a new car.
First, you'll want to see if you qualify.
Get your car's mpg rating on the window sticker, or go to fueleconomy.gov.
Once your car qualifies for a trade in and the car you're buying is eligible for the program, there will be an electronic transfer of funds from the government to the dealer.
The voucher amount would be credited as all or part of the down payment on a qualifying new car.
There may also be incentives. The program would last about a year and it's expected to generate up to 1 million new car purchases. Experts say that the earliest we could see this program in action is October.
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