Cash for Clunkers: All About The Car Allowance Rebate System (CARS)

Cash for Clunkers is a program many people have heard of, but not everyone knows the details. It had something to do with the government paying people to scrap their old cars, right?

Yes and no-- the Cash for Clunkers program did provide cash incentives for turning in old cars, which the owners could use to buy more fuel-efficient vehicles.

But how did it work, how long did it last, and who could use it?

What Was The Cash For Clunkers Program?

The original Cash for Clunkers was a government incentive program that lasted only a few months.

Also known as the Car Allowance Rebate System, or C.A.R.S., this program was started by the administration of President Barack Obama to create an incentive for people to trade in their old, inefficient vehicles for newer, greener cars. This environmentally-driven campaign lasted from July through August of 2009 and offered financial credits for trading in cars that met a certain list of criteria.

These credits could be valued at up to $4,500, and the program itself ended up providing around three billion dollars in cash incentives.

For more information about the money given out by the original Cash for Clunkers, check out the “How much did Cash for Clunkers pay?” section below.

Some sources say that the program was successful because it achieved its ultimate goal of decreasing the number of high-polluting cars on the road. However, there were some negative results of the program, and its economic impact was questionable.

But what about the current situation for scrapping old cars? Will there be a Cash for Clunkers 2021? Let’s dive into the details.

How did Cash for Clunkers work?

To be eligible to participate in the program, car dealers had to process an application through the National Highways Traffic Safety (NHTSA) administration and submit information for the qualified new car dealer.

After that, people were able to trade in their outdated vehicles to earn the government incentive, which was meant to be used to purchase a car with a fuel efficiency of 22 mpg or better. The amount of money the vehicle owner would be given depended on the kind of vehicle you were trading in, its fuel efficiency rating, and the fuel efficiency rating of the new car you intended to buy.

Once you surrendered the old car to the participating dealership, the program would scrap it. The engine would be removed and dismantled before workers destroyed the body.

What Cars Were Eligible?

In order for your car to be eligible for the Cash for Clunkers program, it had to follow a particular set of criteria, including:

  • Must be in a good condition
  • Must be driveable
  • Fuel efficiency rating of under 18 miles per gallon
  • Under 25 years old

If your vehicle fit these conditions, you may have been eligible for the cash incentive, or at least some of it.

However, the eligibility requirements for trucks and heavy-duty vehicles were different, and this sometimes meant that the car owner would get an additional amount of cash. For more info on that, see “How Much Did Cash For Clunkers Pay?”

How Much Did Cash For Clunkers Pay?

The cash incentive amount varied depending on what type of vehicle you were turning in and what kind of vehicle you were planning to buy.

The maximum credit available for clunkers was $4,500. Vehicle owners turning in cars that fit the above criteria (drivable, good condition, less than 25 years old, 18 or under mpg) could expect to receive $4,500 toward their new car.

However, the eligibility requirements were slightly different for trucks-- and this included SUVs, vans, and pickups. The fuel efficiency of the new truck the vehicle owner was buying had to be 18 mpg or better for the vehicle to qualify for the program.

  • If the mpg of the new vehicle was two more than 18 miles per gallon, the truck could qualify for a $3,500 incentive.
  • If the mpg of the new vehicle was better than that, the truck could qualify for a $4,500 incentive.

The rules for heavy-duty trucks were similar. However, the fuel efficiency of the new truck only had to be 15 mpg or better for the vehicle to qualify for the program.

  • If the mpg of the new vehicle was one higher than 15 miles per gallon, the truck could qualify for a $3,500 incentive.
  • If the mpg of the new vehicle was two or higher than 15 mpg, the truck could qualify for a $4,500 incentive.

Did The Cash For Clunkers Program Work?

The answer to this question depends on who you ask and what outcomes you think are best. There were positive and negative results of the program, and it did achieve its ultimate goal of reducing pollution.

Cash for Clunkers effectively decreased pollution from inefficient cars by scrapping more than 677,000 outdated vehicles. Studies estimated that Cash for Clunkers led to a net of 125,000 vehicle procurements.

However, the program was less successful in creating a stimulus for local car manufacturers, as about 51% of the new vehicles purchases were from outside the US.

Some financial analysts argue that the economic impacts of the program were redundant, as the transactions would have occurred naturally over time anyway. Additionally, taxpayers ended up paying about $24,000 per transaction on average.

While the original Cash for Clunkers did not affect the local economy in the way we hoped for, it did help many people in their quest to purchase vehicles that were better for the environment than their old cars and trucks.

Is Cash for Clunkers still a thing?

No-- the government C.A.R.S. program ended over a decade ago and it hasn’t been relaunched.

There is also a car buyback program offered by the State of California Cash for Clunkers and the Bureau of Automotive Repair. New programs may be emerging all the time, so be sure to check out your state’s policies on scrapping old cars in case they are offering any incentives.

Depending on what options you select for scrapping your old car, there may be different features available. Many junk car buying professionals will even come and pick up your vehicle (sometimes for free!), so this can be an excellent option for anyone looking to get rid of a car that doesn’t work anymore. Other options include quick payments and easy transactions.

Will there be another Cash for Clunkers?

If we’re talking about another government incentive program for retiring fuel-inefficient cars, the only answer is that it could happen but isn’t in the current plan.

It’s a definite possibility that a second Cash for Clunkers program could come out of the current administration, focusing on environmental concerns and potentially alternative energy.

Could this mean cash incentives for buying electric cars? Only time will tell.

Summary of Currently Available Options

Since the options for getting cash for your old car changes drastically from place to place, one of the best ways to find out your options is to search for “cash for clunkers near me" and see what local options come up.

Database-type options like the new, private Cash for Clunkers website make it easier to narrow down your search and find reputable car dealers in your area-- but it’s always helpful to research local junk car prices before agreeing to a deal.

Also, remember that there could be incentive programs offered at the state or federal level, so check with your local governments in case there is any cash for scrapping junk cars available. You can even call your local recycling and waste management administrative offices to find out where to scrap your junker if there is no Cash for Clunkers programs in your area.

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