- Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements). Consumers are really only going to be concerned with the 18 mpg in large part. You have to check www.fueleconomy.gov to see where your trade-in ranks for fuel economy. The government is using the new standards to determine eligible vehicles. Don't rely on other websites' info.
- Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in. Don't be tempted to circumvent this requirement. If you didn't own a vehicle before July 1, 2008 (or for 12 months before you trade it in), don't attempt to take part in the CARS program. The feds could slap you with up to a $15,000 civil violation. That would kind of negate your $4500 savings.
- You don't need a voucher; dealers will apply a credit at purchase. An important element of the CARS law is dealers cannot charge you anything for taking part in the program. The government gives the dealer $50 for each clunker turned in.
- Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first. Don't be rushed into making a bad decision, though. At the bare minimum, there is enough money in the program for 250,000 vehicles. That doesn't sound like a lot when you consider about 1.2 million vehicles a month are sold. That doesn't take into account the strict guidelines for people to take advantage of this program. Not all of those 1.2 million vehicles are going to have the combined 22 mpg or more fuel economy that is required.
- The vehicle that you are trading in is required to be destroyed. Therefore, the value you negotiate with the dealer for your trade in is not likely to exceed its scrap value. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle. There's not as much to be concerned about here for the average consumer. In probably 99.99% of the transactions the government credit is going to be greater.