What is 'Clunker '
A popular reference to the old vehicle traded in under the U.S. government's "cash-for-clunkers" program, rolled out in 2009, for a newer more fuel efficient vehicle. For a "clunker" to be eligible for the program it must have satisfied four conditions:
1) It has to be in drivable condition;
2) It has to have been continously insured for one year prior to the trade-in;
3) It has to have been manufactured more than 25 years ago on the date of trade in;
4) It has a combined fuel efficiency of 18 miles per gallon or less.
BREAKING DOWN 'Clunker '
The cash-for-clunker program in the U.S. offered drivers of old "clunkers" up to $4500 voucher for trading in their old car for a newer fuel-efficient vehicle. If an old vehicle was worth more than $4500, then the program would not have been beneficial as the vehicle owner could have just sold their car to the dealer.