DIY & Save: "Cash for Clunkers" Simplified

Want to dump your gas guzzler? Confused about the Cash for Clunkers program? You're not alone. This government program, actually titled the Car Allowance Rebate System (CARS), officially kicked off on July 27. Let's run through some common FAQs about CARS, shall we?

1. What is this "Cash for Clunkers" I keep hearing so much about? CARS lets qualifying car owners trade in their gas guzzlers at participating dealerships for a $3,500 or $4,500 rebate. The catch? The rebate must be put toward the cost of purchasing or leasing a more fuel-efficient vehicle.

2. What's in it for the US government? A few things, actually. According to the official CARS website, the program is intended to boost car sales, get fuel-wasting cars off the road and just generally help to energize the economy. Yes, that is kind of a tall order, isn't it?

3. Why all the kerfuffle? You may have noticed that CARS has been in the news constantly the last few days. That's because the entire one billion dollars allocated for the program was used up in a matter of days. People who missed out are understandably miffed, while car dealers have struggled to cope with the demand.

4. Does my vehicle qualify? If it gets less than 18 miles per gallon it may. Just realize mileage rates are based on official EPA evaluations for your particular make and model, not your own guesstimates. In addition, your vehicle must be roadworthy, plus registered in your name and insured for at least one year.

Finally, it must be under 25 years old, counted from the date it rolled off the assembly line, not the model year. There's tons more fine print determining who qualifies (for example, some larger vehicles are governed by slightly different rules), but these are the basic facts.

The best way to find out for sure if you qualify is to visit the website of your vehicle's manufacturer. For example, GM has a CARS calculator on its website. Plug in your car's stats and the calculator will spit out its advice as to whether or not you qualify and whether it would be to your advantage to do so. Still not sure? Contact your local dealership.

5. Am I too late to take advantage of Cash for Clunkers? Maybe not, but it's still a tad unclear. The initial one billion ran out on Thursday. On Friday the White House announced it was approving an additional two billion dollar replenishment for the fund. However, this still needs to be approved by a vote in the Senate this week.

Bottom line: Although more money is expected to come down the pike, you'd better get in line as demand is high. Be ready to call your dealership the minute new money is approved. Better yet, call immediately and ask how to proceed.

6. How/where do I apply? You don't. Assuming new rebate money becomes available and you qualify, you would let your dealership know you want to participate. The dealership itself takes care of all the paperwork.

7. What will happen to my old Clunker? Alas, it's headed for the scrap heap. Whatever amount the dealer can get for it comes right back to you minus $50 the dealership is allowed to deduct for admin costs. The remainder is applied, along with the CARS rebate, toward the cost of your new vehicle.

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