You may have heard some talk from the news about how President Barack Obama signed into law the “cash for clunkers” program, and how you can get money from your old car to buy a new one. This allows you to take in your old gas hog car and replace it with a more environmentally friendly car.

So depending on how many MPG your old car gets, they will base that on how much money you will receive for your new car. There are however some things about it that limit what you can do in order to receive this credit. Car owners will have the opportunity to get a credit worth $3,500 if they traded in a vehicle getting 17 mpg or less for one that gets at least 22 miles per gallon. The credit would go up to $4,500 if the new car got mileage that was at least 10 mpg higher than the old vehicle. You will find the mpg listed on the window sticker.

Taxpayers can claim the deduction on their 2009 tax returns, regardless of whether they itemize deductions. Your new car also has to be a brand new car, not a used car. The bill provides around $1 billion for the auto sales program from July through November and the Congressional Budget Office expects that with a total of around $4 billion, about 1 million new vehicles could be purchased. The government is expected to implement the program by early August.

Dealers are very excited with this because they need shoppers in their showrooms. Many intend advertise very heavily and combine the government plan with other specials, providing some help at a time when the industry is struggling to sell cars. So if you are looking for incentive to get that new car you got your chance. Don’t worry about missing out on the opportunity to get your new vehicle, because the government isn’t expected to implement the program until early August.