Trade-in vehicles must be rated at no more than 18 mpg to qualify, meaning it will benefit truck, SUV and van owners more than passenger car owners. For those who trade in a car that gets at least 4 mpg more, they'll receive a $3,500 voucher; pick a car that averages 10 mpg more and those buyers will get an extra $1,000 for $4,500 total.
The measure will now move to the Senate, where if it passes, it will head to President Barack Obama for his approval; he has said he would support it. It is expected to go into effect within 30 days of Obama's anticipated signature, but it won't be retroactive for purchases made earlier this year.
Trade-in cars must have been insured at some point during the last year and they can't be more than 25 years old, so don't go rushing towards a junkyard to pick up a rustbucket belching more smoke per mile than even the least efficient new car wheezes out in a year.
The program is designed to last for a year - or until funding runs out. The House says it will spend about $4 billion that was expected to be allocated to a war supplemental spending bill, rather than using previously allocated dollars - as had initially been proposed by Michigan Democrat Debbie Stabenow.
Dealers will be required to prove that traded-in vehicles have been crushed or shredded, and not resold.