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Cash for clunkers kicks in

Dealers now know how they will be compensated for clunkers and where they can get rid of them.

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By Gerri Willis, CNN personal finance editor

For more information on managing your largest investment, check out Gerri Willis' 'Home Rich,' now in bookstores.

NEW YORK ( -- We've been hearing a lot about "cash for clunkers" in recent months. But it kicks into high gear this week now that final rules have been published. Here's a clunker update.

It technically started back on July 1st, but many auto dealers had been reluctant to do "cash for clunkers" deals until they understood the requirements in detail. On Friday, the National Highway Traffic Safety Administration published final rules detailing how dealers can get their checks and dispose of cars. The official name of the program is the car allowance rebate system or "CARS" for short. It goes from July 1 to November 1, 2009 or until the funds allotted by Congress run out.

Anyone who might have already traded in their clunker in the past few weeks is eligible for a rebate as long as it meets these requirements.

  • Your old car must be less than 25 years old on the trade in date.
  • It has to get 18 miles per gallon or less.
  • It must be registered or insured under your name for at least one year.
  • The new car needs to get at least 22 miles per gallon.

The credit will be anywhere from $3,500 to $4,500 based on how many more miles per gallon your new car gets.

And you could get more...

Since the program requires the scrapping of your trade-in vehicle, the dealer must disclose to you an estimate, however minimal, of the scrap value of your trade in.

The dealer gets $50 of the scrap value and you'll get the rest. This is in addition to the rebate, and not in place of it.

For full eligibility requirements check out. Cars hotline: 1-866-car-7891 or go online to

Consumers do not need to register anywhere or at anytime for this program. But here's what you'll need at the dealership:

  • One year proof of insurance.
  • Proof of registration going back at least one year.
  • A "clear" title. This means it must be free of any liens. If you have any, you need to get them cleared before going to the dealer.
  • You'll also need the vehicle manufacturer date found on the driver's door.

Now if your vehicle doesn't meet these requirements, but you're in the market for a new car, the best thing for you to do is to wait until the fall to buy.

That's when new models hit the lot in September, and you'll be able to find great deals on the current year's model.

-- CNN's Jen Haley contributed to this article.

Got a financial dilemma? Go to to submit questions, read the Help Desk articles and check out new Help Desk videos. And tune in to CNN's Newsroom Tuesdays and Fridays, when Gerri Willis and other experts answer your questions. To top of page

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