Late Thursday the US Senate passed the $106 billion war appropriations bill which had previously been passed by the House of Representatives. Included in the bill was a $1 billion provision called "cash for clunkers." This money is earmarked to give to US consumers who purchase new fuel-efficient cars within the next few months.
The program is designed to both stimulate new car sales as well as encourage the adoption of high fuel efficiency vehicles including but not limited to gas-electrics and pure electric cars.
If a person trades in an old car that has a fuel efficiency rating of 18 mpg or less for a new car that gets at least 22 mpg they will receive a $3500 cash voucher from the government toward the purchase. If the new vehicle gets at least 10 mpg or more than the old one, the purchaser will receive $4500. For light trucks and SUVs, the new vehicle needs to get at least 18 mpg and be 2 mpg more efficient than the older vehilce for the $3500 voucher, 4 mpg or more for the $4500 voucher.
The bill will soon be signed into law by President Obama and has the potential for inducing about 250,000 efficient vehicle sales. The program would go into effect 30 days after the President signs it into law, during which time the National Highway Traffic Safety Administration will develop the regulations.
The old car has to have been owned continuously for at least a year, be drivable, and be built after 1984.
The program ends in November, but if it works a longer-term measure could be considered.
To see if your old car is eligible, check here: fueleconomy.gov