'Cash for Clunkers' Law: At Most Boost Auto Sales 3% in 2009

The Car Allowance Rebate System (CARS) -- Uncle Sam will cut checks of $3,500 to $4,500 to dealers so they can buy old cars that get 18 miles per gallon or less and then sell the owner a more fuel-efficient replacement.  The probem is that the feds have approved only $1 billion for the program. That could help fund the purchase of just 250,000 cars—not much more than a week's worth at current sales levels—between August, when the program likely will start, and Nov. 1, when it ends.

CARS makes little sense for most passenger-car owners. The government will cut checks of $3,500 to $4,500 to dealers so they can buy old cars that get 18 miles per gallon or less and then sell the owner a more fuel-efficient replacement.

But most cars on the road get more than 18 mpg, so they won't qualify. And many that are thirsty enough to warrant the deal are luxury models worth a lot more than $3,500 to $4,500.  Still, its better than nothing.

Here's the official government website - http://www.cars.gov/