Chrysler to match ‘cash for clunkers’ incentive

updated 2:15 p.m. ET July 22, 2009

AUBURN HILLS, Mich. - Chrysler Group LLC said Wednesday it is offering $4,500 in cash toward the purchase of a new vehicle as it seeks to match a government incentive for people to trade in their old gas guzzlers.

The automaker said it will offer cash or zero percent financing for six years on most of its 2009 Chrysler, Dodge or Jeep models. The incentive begins Thursday and lasts through Aug. 31.

Chrysler said in a statement that buyers are eligible for the new incentive even if they are not trading in a vehicle under the government's "cash for clunkers" legislation.

That program's final rules will be announced Friday. It offers vouchers to car shoppers who trade in their old, fuel-inefficient vehicles for a cleaner new vehicle.

Not all vehicles qualify under the legislation, however. Car shoppers get a voucher worth $3,500 if they trade in a vehicle getting 18 mpg or less for one getting at least 22 mpg. The voucher grows to $4,500 if the new car's mileage is 10 mpg higher than the old vehicle.

Owners of sport utility vehicles, pickup trucks or minivans getting 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV got at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV was at least 5 mpg higher than the older vehicle.

That means some consumers could, in theory, get up to $9,000 off a new Chrysler vehicle if they trade in and buy the right combination of vehicles. According to the auto Web site Edmunds.com, 16 Chrysler vehicles are fuel efficient enough to qualify a shopper for a voucher under cash for clunkers, so long as the trade-in vehicle qualifies as well.

Chrysler emerged from Chapter 11 bankruptcy protection last month under new ownership and is now working to lure back car shoppers in a depressed market. Chrysler sales were down 46 percent for the first six months of the year.

Industrywide sales are down 35 percent.

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