The $1 billion "cash for clunkers" measure would provide credits to car buyers who trade-in their vehicles for more fuel efficient models. Assuming Obama's anticipated signature, car dealers could begin honoring the rebates worth up to $4,500 beginning July 1. Learn more about the legislation when you read more.
- Trading in a vehicle getting 18 miles per gallon or less for one getting at least 22 mpg: $3,500 voucher.
- Customers could get an additional $1,000 (so $4,500 total) if the new car’s mileage is 10 mpg higher than the old vehicle.
- Trading in sport utility vehicles, pickup trucks, or minivans for a new truck or SUV: $3,500 if new vehicle gets at least 2 mpg higher than old one; $4,500 if mileage is 5 mpg higher.
The program makes sense for people driving cars with trade-in values less than $3,500 or $4,500, and the program's critics argue that despite the vouchers, people driving these types of cars won't be able to take on new car payments. Car dealers, however, think the program will lure shoppers in and they plan to combine the government vouchers with other incentives.