How to Get the Cash for Clunkers Car Rebate

This rebate is no longer available.

The Cash for Clunkers program (originally named CARS, the car allowance rebate system) is a $3 billion dollar government program meant to stimulate the economy and protect the environment by giving consumers a $3,500 to $4,500 rebate when they trade in their old car for a new one at any dealership. When it was first announced, Cash for Clunkers was an instant success; it gave consumers an incentive to buy a new car, and gave the economy a small boost in July 2009. However, the details of the Cash for Clunkers rebate program are a little hazy, and if you’re thinking of taking advantage of CARS before the money runs out it is best to know the facts.

Here is what you need to bring to the dealer to qualify for the rebate:

• Proof of insurance for one year.  Your proof must show the name of the insurance company, policy number, VIN and the start and end date of insurance (showing at least 1 year).
• Proof of registration for one year.  Your vehicle registration must show that the car has been registered for one year.
• A completely clear lien. You must provide evidence on the face of the title showing that there is no lien and the title has been cleared (signed and stamped accordingly). An attached lien release from the lien holder is also acceptable.
• Your vehicle.  It must be less than 25 years old (as of the date on the driver’s door/door jamb) and with gas mileage of less than 18 miles per gallon.

Please remember that there is no need for you to give your social security number to the dealer – and in fact, doing so puts you at risk for identity theft. If a dealer asks you for your social security number, don’t hand it over. You should question the validity of the dealership.

Once you have supplied the above items to the dealer, they will make sure that you and your trade in vehicle are completely qualified for the rebate. This means that the trade in must be:

• In drivable condition
• Registered to you for at least one year
• Insured for at least 1 year
• The trade in is titled in your name for at least one year
• The trade in gets less gas mileage than the car you attempting to purchase
• You have not previously participated in the CARS program

Once the dealer has established that you qualify, you are automatically credited the rebate towards a car with the proper gas mileage. You must leave your old car at the dealership and consequently the dealer must give you your new car once the deal has been made. After the sale, the dealer will take all the information given to him or her by you and hand it all over to the NHTSA. The NHTSA will make sure that you fulfill the requirements and about 10 days later will issue a financial credit to the dealer. As a consumer you must remember that there is no need to fill out a voucher, and there is also no need to give away your social security number.

Laws on this topic may vary from state to state. This content is not meant to provide you with complete information and it is not intended to be legal or tax advice. It is recommended that you consult with your own attorney, accountant or other advisor regarding your specific situation.