Cash for Clunkers: How it works

It's been roughly a month or so since President Obama helped push the controversial "Cash for Clunkers" program through Congress. For those of you who are still hiding under a rock, this helpful video from Kelley Blue Book that explains how this program

Gary Spencer
2 min read

With many Americans losing jobs and an economy that's still in the crapper, most of us are having trouble just making ends meet, let along trying to purchase a brand new automobile. And with the government trying just about anything to try and stimulate the economy, The U.S. government is sponsoring a program called Car Allowance Rebate System (CARS for short) and perhaps better known as "Cash for Clunkers".

The basic concept of CARS is to encourage Americans to purchase new automobiles that more eco-friendly and fuel efficient than those of the past by offering a cash rebate by trading in older vehicles (hence, the nickname "Cash for Clunkers"). Based on several mitigating factors, one's "clunker" could bring them up to $4500 from Uncle Sam himself. The program went into effect back in July and since its inception has been met with both derision and approval. However, its initial popularity nearly swallowed up the initial $1 billion dollars set aside for the program, and President Barack Obama had to sign on to approve an extra $2 billion to extend the program's existence through the end of October 2009.

The "Cash for Clunkers" program has been hotly debated and scrutinized since its inception, and has remained a controversial subject despite CARS' seeming popularity with the general public. Some are of the opinion that its positive attributes of reviving the automotive system and giving struggling Americans a rebate for doing so makes it a win-win, in addition to its environmental consciousness. However, others have argued that the scrapping of the "clunker" vehicles may be just as harmful if not more so than driving the clunkers until (literally) the wheels fall off. But that's another argument for another time...

There's many out there who aren't sure of the specifics of how the CARS program works, and its criteria for what constitutes a "clunker". Well, I found this pretty thorough video from the experts at Kelley Blue Book that helps a potential customer by answering common questions and walks you through the procedures for finding out how much your "clunker" may be worth as a trade-in. Sure, it's not the most exciting thing I've ever watched, but this a timely subject that I think the better we understand the program, the more informed decisions and opinions we'll all have.