After receiving President Obama's signature, the CARS (Car Allowance Rebate System) vehicle scrapping program is officially law as of this afternoon.
Otherwise known as 'cash-for-clunkers', the $1 billion incentive program is aimed at spurring slumping automotive sales with the trading in of older, less fuel efficient vehicles with new eco-friendly rides.
Traded in vehicles will be scrapped and will allow owners to claim a federally issued voucher worth $3500 to $4500 (depending on fuel economy and vehicle) used towards the purchase of their new car.
With President Obama's signature, so begins a 30-day period of program building in which legislators will hash out all of the law's fine details.
CARS was signed into law as part of a $106 billion war spending fund aimed at financing the conflict in Iraq and Afghanistan.
Below are the full CARS requirements per the Department of Transportation:
The requirements: Your trade-in must
* Have been manufactured less than 25 years before the date you trade it in.
* Have a "new" combined city/highway fuel economy of 18 miles per gallon or less. (Don't know your rated fuel mileage? Check FuelEconomy.gov.)
* Be in drivable condition.
* Be continuously insured and registered to the same owner for the full year preceding the trade-in.
So, what are the catches? The MSRP of the new vehicle cannot exceed $45,000 and the new car must achieve at least 22 mpg (18 mpg for trucks and SUVs). And the law requires the destruction of your trade-in, meaning you'll negotiate for scrap value with your dealer.
Check the Web site below for more information.
Source: Automotive News (Subscription required), CARS.gov