On June 24, 2009 President Obama signed into law the “Cash Allowance Rebate System”. This law is affectionately known as “cash for clunkers”. The program provides a US Government credit to new car buyers when they purchase a new more fuel efficient vehicle and trade in a less efficient vehicle. The program will run from July through November 1, 2009. Here are some of the details of the program:
• The credit is for $3,500 to $4,500. The credit escalates if you buy a more fuel efficient vehicle.
• The trade-in vehicle must get less than 18 miles per gallon (the requirement is less for SUV’s, large commercial pick-ups and vans).
• The new vehicle must get at least 22 miles per gallon (the requirement is less for SUV’s, large commercial pick-ups and vans).
• The trade-in vehicle must be less than 25 years old.
• The trade-in vehicle must be destroyed, so you will receive limited value for it from the dealer.
• Only the purchase of new vehicles qualifies for the credit.
• The trade-in vehicle must have been registered in your name for the preceding 12 months.
• $1 billion has been appropriated for this bill. If all the funds are exhausted prior to November 1, 2009, then the program will end early.
The Department of Transportation will be issuing detailed rules for the program no later than July 24, 2009. If you are considering a new car purchase and think you will qualify, you may want to wait until the program rules are finalized.
You can get more information at www.cars.gov.
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