Obama signed into law a program called car allowance rebate program. It helps you purchase a new more efficient car when you trade in a less fuel efficient car. All the details of the program should be in by the end of July, 09 and will  end sometime in November.

Your vehicle must be less than 25 years old on the trade-in date

Only purchase or lease of new vehicles qualify

Generally, trade-in vehicles must get 18 or less MPG

Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in

You don’t need a voucher, dealers will apply a credit at purchase

Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first.

The vehicle that you are trading in is required to be destroyed. Therefore, the value you negotiate with the dealer for your trade in is not likely to exceed its scrap value. The law requires the dealer to disclose to you and estimate of the scrap value of your trade-in vehicle.