From July to November, you will be able to turn in your gas guzzling clunker for a voucher as high as $4,500 that you can apply to the purchase of a new fuel-efficient car.
So what’s not to love?
Well, plenty, say environmentalists.
The Consumer Assistance to Recycle and Save Act of 2009 [1] (also known as "Cash for Clunkers") was modeled on programs in California and Texas designed to get gas guzzlers off the road and replace them with more fuel-efficient vehicles. Sounds like a good idea, of course, but after making its way through Congress, it’s no longer the stellar carbon-cutting initiative some environmentalists would like.
Here’s how it works: Car owners whose vehicles get 18 mpg or less can take their vehicles to an auto dealer and get either a $3,500 or $4,500 voucher to buy a new, more fuel efficient car. The size of the voucher depends on how much of a fuel economy bump you get. If your new car is 4-9 mpg more efficient, you get $3,500. If your fuel efficiency upgrade is 10 mpg or greater, you get $4,500. (The rules vary for trucks. This awesome chart [2] at Jalopnik spells out the details.)
The first complaint of some environmentalists, like Climate Progress [3], a blog sponsored by the left-leaning Center for American Progress Action Fund, is that the $ 1 billion program is one of the least cost-efficient ways to reduce greenhouse gasses. In other words, dollar-for-dollar, there are many other ways to get more bang for your carbon-cutting buck.
Another complaint is that the upgrade requirements aren’t all that stringent. Passenger car owners only need to purchase a car that’s 4 mpg more efficient that their current vehicle to qualify for a $3,500 voucher. Heavy truck owners only need to boost their fuel efficiency by 1 mpg!
A third criticism centers on the requirement that consumers buy new cars. This part of the bill helps auto manufacturers with sales. But for consumers, it might not offer the best deal. If the price of buying your preferred car used is $4,500 or more less than the price of buying it new, then taking advantage of the Cash for Clunkers program might not make the most economic sense for your wallet.
Still, if after all this, you’re still interested in the program, here are some things you should know:
- The car you turn in must be from 1984 or later.
- The car you turn in must be rated at 18mpg or less. (Different rules apply to trucks.) Check fueleconomy.gov [4] for your current vehicle’s gas mileage.
- You have to have owned your current car for at least one year (to prevent people from snapping up used cars today so they can flip them tomorrow).
- The vouchers are only good for the purchase (or lease) of new cars, not used ones.
- Since your old car will be scrapped, you won't be eligible for the trade-in price you would normally get if your dealer was going to re-sell your car.
- Check out the official Car Allowance Rebate System (CARS) [5] Web site for more info (especially the FAQs [6]).
- Beware of CARS-related scams [7]. The official CARS site says it will list participating dealers [8] as soon as it gets them registered. (Registration has not yet begun, as of this writing, the government says.)