Know How Car Allowance Rebate System (CARS) aka Cash for Clunkers Program Works

July 28, 2009

Many car dealerships are hoping that the Cash for Clunkers Program will encourage customers to purchase new, more fuel efficient vehicles when they trade in a less fuel efficient vehicle.

On or around July 23rd, rules for the Car Allowance Rebate System (C.A.R.S.) bill (previously called Cash for Clunkers) were solidified and dealers who have signed up to participate in the program have begun working with customers who wish to utilize the program’s benefits.

BBB and regional dealer participants encourage customers wishing to take advantage of this program to get researching vehicle eligibility NOW because the program only runs through Nov 1, 2009, or when the funds for the program are exhausted, whichever comes first.

Current stipulations of the program include:

*the vehicle must be less than 25 years old on the trade-in date

*only purchase or lease of new vehicles qualify

*trade-in vehicles must get 18 or less MPG

*vehicle has to have been registered and insured for 12 months prior to trade-in

*no voucher is needed, dealers will handle all paperwork to apply credit at purchase

BBB warns that like many other programs involving trade-ins and credit due, confusion and misinformation abound. Beware of:

*Random calls with misleading offers to help process the paperwork necessary to get a voucher for Clunker Cash because there is no voucher required and these deceptive calls are merely a ploy to gain personal information from the unwary.

*Cash for Clunkers web sites you come across, especially those that offer to pre-register you or require you to fill out a credit application that will include personal information, like your social security number or bank account. Consumers don’t have to sign up or get pre-approved for this program.

*Anyone outside of the dealership you are working with stating they will handle your reimbursement. You won't get a check or voucher from the government but directly from your participating dealer.

Report such calls or questionable web sites to the Better Business Bureau by calling: 509-455-4200 or 800-356-1007 or emailing: You can also report related schemes at: and internet or email scams at: 

To find out more about how the program works, visit:

Or contact the CARS Hotline at (866)-CAR-7891 or TTY at (800)-424-9153.

Other car-related sites with Cash for Clunkers info:

You are also welcome to contact any participating dealership for further advice.