Cash for Clunkers is shorthand for the Car Allowance Rebate System. This government incentive program passed in response to the 2008 recession to spur auto sales. The plan gave participants up to $4,500 for their old running vehicles (cash for their clunker). The money would be used to purchase a more fuel-efficient new or late-model used vehicle. The program ran from July 1 to August 24, 2009, distributing some $3 billion.
A new version of the program was proposed last year by Sen. Charles Schumer (D-NY). It targets older internal combustion vehicles in favor of zero-emission electric cars. It would earmark $392 billion towards replacing 63 million cars and trucks, or about 25-percent of the current U.S. fleet, with EVs. However, this proposal is not part of the infrastructure bill currently under consideration.
Any old cars purchased by dealers under the Car Allowance Rebate System were required to be scrapped and have their engines disabled, precluding the potential for resale.
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