Forget about turning in old gas guzzlers for slightly more efficient vehicular monsters.
If governments want a 'cash for clunkers' deal that will really have a positive green impact, both environmentally and in keeping money in taxpayers' wallets, they should offer to take over office space leases and buildings--prioritizing on those in car-oriented 'office parks'--in exchange for organizations sending their workforces to home offices.
Governments can then recycle the spaces, working with the owners and real estate firms (and giving them tax breaks to get their buy-in), for other uses: i.e. schools, hospitals, child/eldercare facilities--including tearing them down and cleaning them up to create parks or market gardens. Or they can flip these buildings and land around as brownfield sites, driving property prices so low to make greenfield development i.e. sprawl not attractive. Both means will actually stabilize property values that will benefit landlords of existing properties.
The payoffs from this true cash for clunkers program are plentiful and immediate. There would be fewer cars gouging up expensive 'freeways' thereby reducing congestion and accidents that cost vast sums in lost productivity and in providing emergency services respectively. Not to mention enabling a much-needed shrinking of healthcare costs by minimizing harmful pollution and communicable disease spread i.e. H1N1 in offices.
There would then be less need for billion-dollar/years-to-build mass transit systems, and the need to subsidize sprawl with servicing costs. And there would be less risk of destructive blackouts caused by A/C, lights, TVs, and computers suddenly clicking on when commuters get home.
These gains are on top of the environmental benefits. These include less energy used, cleaner air and more open space. And yes, fewer cars that need to be recycled.