The "cash for clunkers" program is taking form and promises rebates of $3,500 or $4,500 for trade-ins when you purchase a newer fuel-efficient vehicle.
The effective date for the program -- officially known as the
Car Allowance Rebate System (CARS) -- has not yet been set. But Clark expects it to be sometime toward the end of July or the beginning of August. There should be a 2-month buying opportunity through October.
Let's say you start from a baseline of 18 mpg on your current vehicle. If the new car you intend to buy gets 22 mpg or more, then you'd get the $3,500 voucher toward the purchase.
Please note that participating dealers will apply this taxpayer-subsidized credit directly to your purchase. You're only eligible for the full $4,500 voucher if your next purchase gives you at least 10 mpg more than your old vehicle.
Meanwhile, there's a lower threshold for SUVs and trucks. You'll get the $3,500 voucher if your new vehicle get 2 mpg or higher. If it gets 5 mpg or more, you then get the $4,500 voucher.
The vehicle you're trading in has to be drivable and the dealer has to agree to crush it. There are also several rules to prevent abuse of the program. For example, the car you're dumping has to have been registered and insured continuously for at least 12 months prior.
Other countries that have experience with similar programs saw an immediate big increase in sales as a direct result of the program. That's the hope for the American auto market too.
Remember, of course, that there are still some great deals on vehicles available regardless of the "cash for clunkers" program. The more shopping you do, the better the price you will get.
See Clark's tips for buying a new car.Want more info? Visit the official government site at Cars.gov. 
