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Government Cash for Clunkers Program

Written By: Lou Lynch

Got a clunker that you were considering trading in? Now is the time to take advantage of the Car Allowance Rebate System (CARS for short). In effort to reduce the number of older model vehicles with poor gas mileage and antiquated emission systems, the government is now offering a credit of $3500 to $4500 for your gas guzzling clunker. The program is available through participating dealers and designed to help Americans trade in older, less fuel-efficient cars for their more environment friendly counterpart.

Some things to know about the program:

• Act fast! The program runs until November 2009 or until the funding is depleted (whichever happens first).
• The vehicle you are trading in must be less than 25 years old.
• You only qualify if trading in for a new car purchase or lease.
• Your “gas guzzler” must have an MPG of 18 or less (commercial trucks and vans have other requirements).
• The trade in must also be currently registered and insured for up to a full year prior to the trade-in.
• No government voucher necessary, the dealer will apply the credit at time of new car purchase.
• Your trade-in (clunker) is required by the government to be destroyed. This means that the value you negotiate with the dealer will likely not exceed scrap value.

So take another look at that old junker of yours as it might qualify for up $4500. The trade-in can be foreign or American and the credit will not count as taxable income come tax time (unless you are a dealer).

For more info on the Cash for Clunkers program visit Cars.gov