Shopping for a Fuel Efficient Car Just Got Cheaper

If you haven't heard yet Congress just approved the "Cash for Clunkers" bill, also known as the Car Allowance Rebate System which is awaiting final approval from President Obama.  Created as a way to increase the number of fuel efficient vehicles on the road as well as to provide a subsidy to ailing American car companies, the "Cash for Clunkers" program will pay consumers up to $4500 to trade in their old less fuel efficient vehicle for a new fuel efficient vehicle.  Total funding for the program?  $1 Billion.  Requirements for assistance through this plan:

• Your vehicle must be less than 25 years old on the trade-in date.

• Only purchase or lease of new vehicles apply.

• Trade-in vehicles must get 18 or less MPG. (requirements are different for large pick-ups and cargo vans)

• Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in.

• You don't need a voucher, dealers will apply a credit at purchase.

Here are the six steps recommended by the National Highway Traffic Safety Administration for obtaining a financial credit through the car allowance rebate system:

1. Visit CARS.gov for current information about the program.
2. Determine if you qualify, then shop for a new car.
3. Bring the title, registration and insurance papers showing continuous registration and insurance coverage for the past full year.
4. When you buy or lease a new vehicle, the dealer handles the submission of all required information to NHTSA.
5. NHTSA ensures that your purchase meets the requirements.
6. About 10 days later, NHTSA will issue a financial credit to the dealer—assuming all program requirements have been met.