How Does the Cash for Clunkers Program Work?

Cars traded in for the Cash For Clunkers program sit in a storage lot August 26, 2009 in Fairfield, California.
Justin Sullivan/Getty Images News/Getty Images

Question: How does the Cash for Clunkers program work?

Cash for Clunkers is a federal program designed to stimulate U.S. auto sales and help the environment by providing an economic incentive for consumers to replace old, low-mileage vehicles with new, fuel-efficient models that are safer and emit less pollution and fewer greenhouse gases.

Answer: The basic concept is simple: if you trade in a low-mileage vehicle for one that meets a higher mileage threshold set by the Cash for Clunkers program, the government will provide up to $4,500 to help you purchase the new fuel-efficient vehicle.

The details, of course, are more complicated.

Under the Cash for Clunkers bill passed by Congress in June 2009, the passenger car you trade in must meet two criteria:

  1. The car has been registered and in use for at least a year (this provision prevents people from buying an old beater from a junkyard and trading it in for a new car);
  2. The vehicle must have a combined city and highway fuel-economy rating of 18 mpg or less.
  3. To qualify for the Cash for Clunkers program, the new car must be priced at $45,000 or less;
  4. The new car must have a federal fuel-economy rating that is at least 4 mpg better than the old car you’re trading in to qualify for a $3,500 voucher, or be rated at least 10 mpg better to get the maximum payment of $4,500.

The rules for trucks are a little trickier.

For light- and standard-duty model trucks, which include most sport utility vehicles (SUVs), vans and pickup trucks:

  • The old vehicle must have a fuel-efficiency mileage rating of 18 mpg or less.
  • The new vehicle must be rated at least 2 mpg better to qualify for the $3,500 voucher or at least 5 mpg better for the $4,500 payment.

heavy-duty trucks

  • The old truck you’re trading in must be rated 15 mpg or less.
  • The new truck must be rated at least 1 mpg better to get the $3,500 voucher and at least 2 mpg better to qualify for the $4,500 voucher.

work trucks

The old truck has to be a 2001 model or older, and $3,500 is the only amount offered to help with the purchase of new work trucks.

To compare vehicle mileage ratings for all model years back to 1985, see the interactive chart at