In another attempt to stimulate the flagging economy, both the Senate and the House are considering what are being called Cash for Clunkers bills – in other words, legislation that would give consumers cash rebates for trading in gas-guzzling vehicles for new, fuel-efficient models.

Both versions of the bill work on the principle that getting Americans to buy greener cars is good for both the environment and the auto industry – but the details vary somewhat in the two houses of Congress.

The House Version: Buy New

The House of Representatives has already passed its version of the bill, which includes the following provisions:

• Drivers of larger vehicles (minivans, trucks and SUVs) could get a $3,500 voucher for trading in vehicles with 18 MPG or less for ones with at least two MPG more.
• People driving passenger cars would receive a voucher for $3,500 when they traded in a car getting less than 18 miles per gallon (MPG) for one getting at least 22 MPG.
• Drivers of larger vehicles (18 MPG or fewer) could get a $4,500 voucher for an increase of only five MPG.
• Passenger car drivers could get the voucher for $4,500 for exchanging a car with 18 MPG or less for one with a minimum 10 MPG improvement.
• A $3,500 voucher would be available for those who purchase large trucks (vans and pickups between 6,000 and 8,500 pounds) with an MPG of at least 15.

In order to qualify for the voucher, your car must be a 1984 model or newer, drivable and insured continuously to you for at least a year.

The vouchers would be available electronically through participating dealers when you bought or leased a new car.

The Senate Version: New or Used

The Senate’s version of the bill is slightly different and includes a provision for Americans who are interested in buying a used vehicle rather than a new one.

• Old cars must get 17 MPG or less and new cars must get 24 MPG or more to qualify for a voucher.
• The voucher amount is graded, based on the MPG increase: for passenger car drivers who increase the MPG by 7, a $2,500 voucher; an increase of 10 MPG would yield a $3,500 voucher; and an increase of 13+ would yield a $4,500 voucher.
• A used car getting 24+ MPG or a used larger vehicle with 20+ MPG would qualify the buyer for a $1,000 voucher.
• Larger vehicles with 17 MPG or less traded for those with 20+ MPG would qualify for a voucher. The grading system works here, too: for an increase of 3 MPG, a $2,500 voucher; for an increase of 6 MPG, a $3,500 voucher; for an increase of 9+ MPG, a $4,500 voucher.
• Large trucks would also be eligible for the graded voucher amounts.

If you're looking to save money on a new car, this program could be great.

But, if you're struggling to make it month to month, it's probably not best to buy new right now.

If you are having difficulty making ends meet, consider the filing bankruptcy option.

Learn about cars in bankruptcy.