Beware of Cash For Clunkers Scams

The Cash For Clunkers bill was recently passed by Congress, and is currently waiting to be signed into law by President Obama. The Cash For Clunkers Bill, officially called the Car Allowance Rebate System (CARS), gives consumers the opportunity to trade in old vehicles for a voucher to be used for a new car.

Understanding the  Car Allowance Rebate System (CARS)

Here is how the Car Allowance Rebate System (CARS) works: Consumers need to turn in an old vehicle to receive a $3500 to $4500 voucher that can only be used on a new car. The voucher has no cash value and cannot be transferred to another individual. The car will be destroyed, so it is important to note that trade-in values should be less than the voucher amount, or it will not be worth trading the car in for the voucher. Here is some more information about the Cash for Clunkers Bill:

  • Only purchase or lease of new vehicles qualify.
  • 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.
  • Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.

Beware of Cash For Clunkers Scams

Thieves and con artists are already taking advantage of the confusion surrounding the Cash for Clunkers Bill. It is important to understand how the Cash for Clunkers Bill works to avoid the scams that are already taking place. For official Cash for Clunkers information, visit the official site at, or the Frequently Asked Questions.

To avoid Cash for Clunkers scams you should also follow these tips:

If it sounds too good to be true – it probably is. Common scams include:

  • Websites alleging to “pre-authorize” applications.
  • Websites offering to give you cash for your voucher (vouchers are non-transferable).
  • Websites that state they are the “official” Cash for Clunkers or Car Allowance Rebate System (CARS) website. The official site is

The best bet is to visit the official site before giving away any information.

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Date published: July 1, 2009. Last updated: September 29, 2014.

Article by

Ryan Guina is the founder and editor of this site. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is currently serving in the IL Air National Guard. He also writes about money management, small business, and career topics at Cash Money Life. You can also see his profile on Google.


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