Cash for Clunkers
CARS Stimulus Program
On August 24, 2009, the federal government ended its popular “Cash for Clunkers” Car Allowance Rebate System (CARS), a scrappage program that offered credits—through participating dealers—to U.S. citizens trading in their used vehicles for new, more fuel-efficient models. The $3 billion program spent its initial $1 billion allotment during the first week of operation, prompting Congress to quickly approve an additional $2 billion. In all, nearly 700,000 automobiles—worth $2.9 billion in rebates—were sold throughout the incentive program. CARS, originally intended to run until November 1, was designed to infuse more green into the automotive industry by helping jumpstart sales with an infusion of cash while encouraging the purchase of higher mileage cars and trucks.
Depending on the difference in fuel economy between the trade-in and the newly purchased vehicle, the credit was either $3,500 or $4,500. Certain conditions applied; for example, a trade-in must have been still drivable, less than 25 years old and have gotten 18 mpg or less combined fuel economy when new. Buyers also had to purchase (or lease) a vehicle costing less than $45,000 MSRP and getting a combined 22 mpg or better EPA rating. All clunkers traded in were destroyed. The program’s top sellers were the Toyota Corolla, Honda Civic, Toyota Camry, Ford Focus, Hyundai Elantra, Nissan Versa, Toyota Prius, Honda Accord, Honda Fit and Ford Escape.