Car Allowance Rebate System - CARS


DEFINITION of 'Car Allowance Rebate System - CARS'

A U.S. government program under the Obama administration that allowed individuals to trade in used vehicles that did not meet government-specified standards of fuel economy in exchange for a discount of either $3,500 or $4,500 off the purchase or five-plus-year lease of a newer, more fuel efficient vehicle. The program began on July 1, 2009, and ended shortly thereafter because it became so popular that funds quickly ran out.

BREAKING DOWN 'Car Allowance Rebate System - CARS'

Commonly known as "Cash for Clunkers," the program's stated purposes were to reduce air pollution, to stimulate consumer spending and to prop up struggling U.S. auto manufacturers (though the program did allow the purchase of foreign vehicles). Ultimately, consumers traded in as estimated 680,000 vehicles. Car dealers were required to crush or shred the trade-in vehicles.

  1. Cash For Caulkers

    The colloquial name for the United States' Home Star Energy Retrofit ...
  2. Fuel Tax Credit

    A federal subsidy that allows businesses to reduce their taxable ...
  3. Cash For Refrigerators

    A federal energy efficiency program introduced in the fall of ...
  4. Clunker

    A popular reference to the old vehicle traded in under the U.S. ...
  5. Cash For Clunkers

    A program that allows car owners to trade in their old, less ...
  6. Tax Credit

    An amount of money that a taxpayer is able to subtract from the ...
Related Articles
  1. Insurance

    The Government And Risk: A Love-Hate Relationship

    Though the U.S. government can help its citizens by subsidizing risky loans, the costs always come back to the taxpayers.
  2. Budgeting

    12 Car Insurance Cost-Cutters

    If car costs are dragging you down, find out how to free yourself from some of the extra weight.
  3. Personal Finance

    Top 10 Ways To Get Top Dollar For Your Car

    Find out what steps you can take to reduce the depreciation of your vehicle.
  4. Options & Futures

    Beginner's Guide To Auto Insurance

    Find the perfect policy that suits both your coverage and budgetary needs.
  5. Options & Futures

    Your Car: Fixer-Upper Or Scrap Metal?

    Sometimes buying a new car can be cheaper than shelling out for repairs.
  6. Insurance

    The True Cost Of Owning A Car

    Driving is often the most convenient way to get around, but it'll cost you.
  7. Options & Futures

    Analyzing Auto Stocks

    Find out what to consider before taking a ride with stocks from this industry.
  8. Home & Auto

    Luxury Cars with the Best Resale Value

    Autos rarely appreciate in value. But if you want a set of wheels that'll least hold its value over time, these cars can go the distance.
  9. Stock Analysis

    How Expensive Is Whole Foods, Really?

    Learn about Whole Foods Market, Inc., and discover how Whole Foods pricing actually compares to that of other grocery store operations.
  10. Stock Analysis

    4 Quick Service Restaurants for Your Portfolio

    Learn about the four quick service restaurants with attractive investment theses and growth prospects that can be valuable additions to your portfolio.
  1. What are the economic implications of government subsidies on fuel costs?

    In order to make the price of oil more affordable to its citizens, governments sometimes provide subsidies, which can allow ... Read Full Answer >>
  2. Can your car insurance company check your driving record?

    While your auto insurance company cannot pull your full motor vehicle report, or MVR, it does pull a record summary that ... Read Full Answer >>
  3. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  4. What are some common ways product differentiation is achieved?

    There are many ways to achieve product differentiation, some more common than others. Horizontal Differentiation Horizontal ... Read Full Answer >>
  5. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>
  6. Is the retail sector also affected by seasonal factors?

    Generally speaking, the retail sector is highly seasonal. Almost invariably, sales in the retail sector are highest in the ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!