'Cash for clunkers' to boost car sales

New car buyers or leasers can now get up to $4,500 when they qualify for the government's newly launched Car Allowance Rebate System (CARS) program, also known as the 'cash for clunkers' program.

According to the National Highway Transportation Safety Administration, the federal agency overseeing the program, new car buyers will receive a discount on their new purchase of between $3,500 or $4,500 when they trade in their older low-mileage vehicle for a new model with higher mileage.

To qualify, perspective car buyers must have a trade-in that is 25 years old or less, have had the car insured for the previous year and have full ownership of the car's title. The trade-in car must also have a combined highway/city gas mileage of 18 mpg or less at the time it was new.

The new car should have a combined city/highway fuel economy of at least 22 mpg. (Trucks have slightly different requirements.) If the new car's fuel economy exceeds 10 mpg more than the trade-in, that car buyer could be eligible for the higher $4,500 credit.

The program officially began July 24th, but car buyers who purchased new qualifying vehicles after July 1st can apply retroactively for the credit. The program is scheduled to continue through November of this year.

To determine eligibility, new car buyers are encouraged to use data at to determine the fuel economy of their trade-in vehicle and the new car they want to buy. To check further requirements and details see .

Auto industry analysts estimate the program could generate sales of some 500,000 cars, a boon to the ailing domestic auto industry.

CARS also earned the endorsement of environmental groups like the Sierra Club. People considering a new car purchase or lease can check the for more information about new models with the highest fuel economy.

'Our online guide can help consumers choose a vehicle that gives a boost to both the economy and our environment,' said Ann Mesnikoff, director of Sierra Club’s Green Transportation Campaign. 'Choosing the right new vehicle will save money at the pump, cut dependence on oil, reduce carbon emissions, and help the auto industry.'