Consumer Law

End of Cash for Clunkers Means Steer Clear of Scams

  • New government program "Cash for Clunkers" provides consumers with a credit when they replace their old car with a new, more energy-efficient car
  • "Cash for Clunkers" program results in many scam Web sites attempting to get personal information from consumers


President Obama signed the cash for clunkers bill into law on July 24, 2009. Less than 24 hours later, scams relating to this plan began popping up.

Several Web sites claiming to be related to the Cash for Clunkers program are asking consumers to provide detailed personal information, such as their names, addresses and even social security numbers, so that they can register for the program and obtain vouchers in order to participate in the program. However, these sites are unauthorized and are not legitimate. Consumers don't need to register in order to participate in the program and should not, by any means, give out their social security information.

What Is "Cash for Clunkers?"

Cash for Clunkers refers to the new government program called Car Allowance Rebate System (CARS). Under this program, the government gives incentives to consumers to purchase more fuel-efficient cars. When you trade in your less fuel efficient vehicle for a new, more fuel efficient vehicle, you get a voucher ranging from $3,500 to $4,500.

The program was designed to provide stimulus to the economy by boosting car sales, while at the same time, putting safer, cleaner and more fuel-efficient cars on the roads.

Consumers can verify that their "clunker" qualifies for a voucher at If they qualify, they can go to a local new car dealer to make a new car purchase.


To be eligible for the credit, the following conditions must be met:

  • The car must be less than 25 years old on the trade-in date
  • Only the purchase or 5-year minimum lease of new vehicles qualify
  • Generally, trade-in vehicles must get a weighted combined average rating of 18 or fewer miles per gallon (some very large pickup trucks and cargo vans have different requirements)
  • Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in
  • Trade-in vehicles must be in decent condition
  • The program runs from July 1, 2009 until August 24, 2009
  • The new car bought under the plan must have a suggested retail price of no more than $45,000, and for passenger automobiles, the new vehicle must have a combined fuel economy value of at least 22 miles per gallon
  • The Scams

    This program has been very popular and has helped revive the auto industry and economy, however funds quick ran out and the program's end date is August 24, 2009. Furthermore, many scammers have already taken advantage of this opportunity. As soon as the program became law, many Web sites sprang up and attempted to fraudulently capture personal information to be used illegally ("phishing scams").

    Keep this in mind to avoid scams:

    1. You don't need to register for the program as a consumer; only car dealerships need to register
    2. Don't give out your social security number information online
    3. The only official government Web site for prospective car buyers for this program is at
    4. There are many other legitimate sites with information on the program , but be wary of any site that requires you to register or asks for personal information
    5. You don't need a voucher - your price will be automatically reduced at the time of purchase or lease and the dealer will be reimbursed by the government
    6. You will fill out any necessary paperwork at the car dealership, the only item you should have with you is the car title and proof that the car was insured and registered in your name for at least one year
    7. Not all dealers are registered with this program; you can go to find a participating dealer

    What to Do if You Fall Victim to a Phishing Scam

    Because of the great interest in this program and the vast number of Web sites that emerged, even the most Net-savvy people have fallen victim to phishing scams.

    If you have given out your personal information to a Web site purporting to be related to Cash for Clunkers the first thing you need to do is to report it. If you entered in your credit card information, you will need to contact your credit card company or banking institution and explain to them that you have fallen victim to such a scam and that your account may be compromised. Be sure to review your credit card and bank statements to check that there are no discrepancies for several months.

    If you have given your social security number, be careful to not fall victim to identity theft. You should monitor your credit report (free credit reports are available online at You can also contact the Federal Trade Commission for help at or 1-877-IDTHEFT (1-877-438-4338).

    Again, don't give out your information online unless it is to a trusted source. With the Cash for Clunkers program, there is no need to provide any personal information on any Web site.

    Questions for Your Attorney

    • I think I fell for a phishing scam related to the Cash for Clunkers program and I think my identity's been stolen. Can you assist me with clearing up the fraudulent debts made under my name?
    • If I complete a car purchase under the program, who is responsible if the government rejects the clunker credit claim? The dealer? Me? Are dealers holding onto trade-ins until processing is complete?
    • What are the tax implications I need to be aware of as a consumer as I seek to take advantage of the various credits, incentives and programs under the stimulus law?
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