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How do you turn your hot 2002 Ford Escort into cold, hard cash? No problem, Uncle Sam can help. In an effort to stimulate the challenged U.S. auto industry, in June, Congress passed what is now being hawked as the “Cash for Clunkers” Act. Officially, it’s a government program called CARS (Car Allowance Rebate System). Unfortunately, you won’t actually ever see the cash. Instead, you’ll save up to $4,500 on top of any other savings at your auto dealer when you trade in your beaten up jalopy. Your dealer then gets the rebate from the government. It’s not a bad deal. You could end up double or even triple dipping on the savings. If you purchase a fuel-efficient hybrid, you can still qualify for a federal tax credit. Add on top of that any dealer incentives, plus the $3,500 or $4,500 from the government and all of a sudden that new ride is looking pretty good.

Plus, you’ll finally be able to retire that late 80’s hunter green, high-top Dodge Ram Van with the wicked panel art, running boards, and after-market Blaupunkt cassette player. Hmm, on second thought, trade in the wife’s mini-van instead. You never know when you’ll need to find a quiet escape in the warm embrace of your coffee-stained captain’s chair with Boston’s “More Than a Feeling” setting up on entertainment system.

OK, let’s get to the basics. Here are the rules to know:

1. Your trade-in vehicle has to be less than 25 years old.

2. You need to be purchasing or leasing a new vehicle to qualify.

3. In a nod to the Green movement, the program is designed to take old, gas guzzlers off the road. So your trade-in vehicle must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements). Be safe, and double check that your vehicle qualifies before you race over to your auto dealer.

4. Trade-in vehicles must be registered and have auto insurance continuously for the full year preceding the trade-in date

5. Act fast because the program runs through the earlier of November 1, 2009 or when the $1.0 billion program funding runs out. As of today, there was $858 million left in the kitty, or just about enough for another 200,000 sales.

6. Because the program is intended to permanently remove these wasteful, rust-buckets, the dealer is also required to estimate the scrap value of your trade-in and will throw that amount, however small, on top of the rebate as well.

More detailed Program FAQ’s can be found here or call the CARS Hotline at (866)-CAR-7891.

Last, but not least, it is critically important that you get the right auto insurance for your new vehicle. Remember, cruising around in a brand new gem is going to be a lot different than your last ride. And with your hard-earned $$ at stake, you need to make sure you’re covered. In keeping with the money-saving spirit of the “Cars for Clunkers” program, go no further than AutoInsuranceQuote.com to get the lowest quotes on your auto insurance.