Colorado is reviving the “cash for clunkers” program, with an electric twist.

Beginning this Thursday,  income-qualified Colorado residents can begin applying to Colorado’s vehicle exchange program where they can exchange their old, or high emitting, vehicles for an up-to $6,000 credit on a new electric one or $4,000 credit on a used electric vehicle.

According to the Colorado Energy Office, the program is part of a state initiative to have 940,000 electric vehicles on the road by 2030.

For more information on the program and how to sign up: 

How do I sign up?

Visit the official website for the state’s vehicle exchange prior to 9 a.m. on Thursday. This will allow you to familiarize yourself with the program details and gather any necessary documentation to demonstrate your eligibility. It’s important to note that the exchange program operates on a first-come, first-served basis, continuing until the initial funds of $1.8 million are depleted. Given the allocated funds for this program, there will only be around 300 rebates available for the max $6,000 rebate.

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Who is eligible for this program?

To be eligible for the rebate, you must be a resident of Colorado, 18 years of age or older, income-qualified, eligible to purchase or lease a vehicle in Colorado, and own an eligible old, or high-emitting, vehicle. A valid Colorado driver license is required.

Applicants are required to submit proof that they are a Colorado resident and a proof of income to prove they meet the requirements.

Income eligibility is determined by income and household size, based on the index Area Median Income (AMI) in an individual’s county of residence. To meet the income-qualifications for the VXC rebate, your household income needs to be below 80% of the area median income.

A list of acceptable documents can be found on the program’s website.

What are the requirements for the vehicle I need to exchange?

• The vehicle must be operational.
• The vehicle must be gasoline- or diesel-powered.
• The vehicle must meet one or more of the following criteria:
• Vehicle model year must be at least 12 years old (e.g., model year 2011 or older for a 2023 application)
• OR
• The vehicle fails an emissions test in Colorado (no model year requirement).
• The vehicle title must be issued solely to the participant.
• The vehicle must be currently titled in Colorado.
• The participant’s name must match the name on the vehicle title.
• The vehicle title cannot have a lien (e.g., there cannot be an outstanding loan for the vehicle).
• The vehicle must be currently registered under the participant’s name with the Colorado Department of Motor Vehicles (DMV).
• The vehicle title must be either a clear title, bonded title, reconstructed title, affidavit title, rebuilt title, water damage title, or odometer rollback title. It cannot be a salvage title, junk title, or dismantled title.
• Hybrid vehicles, motorcycles, recreational vehicles (RVs), campers, and boats are currently ineligible to exchange.

Which vehicles are eligible to purchase or lease?

Through the program, participants may redeem a point of sale rebate for the following types of vehicles, purchased or leased at an authorized automobile dealer:

• Battery electric (BEV), or fully electric vehicles.
• Plug-in Hybrid Electric Vehicles (PHEVs), which are powered by a battery, with an average range of 20-50 miles, and a traditional gas tank and engine.
• After applying all other rebates, tax credits, or other discounts, participants may redeem the rebate to purchase or lease a vehicle with a pre-tax purchase or lease price of $50,000 or less. Any add-ons, upgrades, destination charges, or other fees are not included as part of the purchase or lease price of the vehicle when determining if the vehicle is eligible for the rebate.

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Can I combine this rebate with other tax credits and/or rebates?

The VXC credit can be combined with state and federal tax credits and other EV rebates. However, other EV rebate programs may not allow participants to combine their rebate with a VXC rebate or other EV incentive (e.g., tax credits). The Colorado Energy Office recommends reaching out to those supplementary programs to determine eligibility. Additionally, after applying all other rebates, tax credits, or other discounts, the VXC rebate may not exceed the remaining purchase or lease price of the vehicle.

Who is behind this program and what’s funding it?

VXC is part of a 10-year plan that the Community Access Enterprise’s board of directors approved in May 2022. A year prior, the enterprise was established in bill SB21-260, signed into law by Colorado Gov. Jared Polis and primarily sponsored by state senators Stephen Fenberg, Faith Winter and house representatives Alec Garnett and Matt Gray. This plan covers fiscal years 2022-2023 through 2031-2032. The program is funded by a combination of American Rescue Act funding, state fees – including gasoline and diesel fuel fees – electric vehicle registration, retail delivery fees, passenger ride fees, short term vehicle rental fees and fee adjustments to account for inflation.