Between July 1, 2009 and November 1, 2009, certain car owners are eligible to receive an instant cash rebate between $3,500 and $4,500 for purchasing or leasing a new vehicle while simultaneously trading in their old vehicles under the provisions of the Car Allowance Rebate System (CARS). The CARS program (also coined as the “Cash for Clunkers” program) was signed into law by President Obama as part of the Consumer Assistance to Recycle and Save Act of 2009 and is administered by the National Highway Traffic Safety Administration.
How to Participate in the CARS Program
The instant rebate is only available on the purchase or lease of new vehicles from participating dealers. Participating dealers will apply a credit to reduce the price paid at the time of the purchase or lease if the program requirements are met. A $3,500 instant rebate is available for a new vehicle if it is more fuel efficient than the owner’s old vehicle by at least four (4) miles per gallon. Similarly, a $4,500 instant rebate is available if the new vehicle is more fuel efficient than the owner’s old vehicle by at least ten (10) miles per gallon. No vouchers are needed and there are no requirements to sign up or otherwise enroll in this program. It is the dealer’s responsibility to make sure the program requirements are met; they will then seek reimbursement directly from the Federal Government.
What Vehicles Are Eligible for the Rebate?
Generally, there are four requirements that the old vehicle must meet in order to qualify for the instant rebate. Note there are additional requirement for very large trucks and cargo vans. The basic requirements are as follows:
- Vehicle must have been manufactured less than 25 years before the trade-in date
- Vehicle must have a fuel economy of 18 miles per gallon or less
- Vehicle must be in a drivable condition
- Vehicle must be continuously insured and registered to the same owner for an entire year prior to the trade-in date
Some of the most frequently asked questions related to the CARS program can be found on the CARS government website. Below is information related to the most popular questions. Please visit the website, www.cars.gov, for additional information related to this program.
How to Tell When a Vehicle Was Manufactured
The month and year of manufacture (e.g., 1-96 (January 1996)) appear on the safety standard certification label that is located on the frame or edge of the driver’s door in most vehicles.
How to Calculate the Combined City/Highway Fuel Economy Rating on the Trade-in Vehicle
Go to http://www.fueleconomy.gov/feg/sbs.htm and click on the model year of the trade-in vehicle, the make, and then the model. Under the words "ESTIMATED NEW EPA MPG" in the red banner, there is a red number with the word "COMBINED" under it. That is the new combined city/highway fuel economy for the vehicle. It may also be helpful to enter the make, model, and model year of a new vehicle to see its combined MPG for comparison.
Will a Trade-In Credit be Received in Addition to the Rebate?
No. The law requires that vehicles traded-in under the CARS program be destroyed. Therefore, the value negotiated with the dealer for the trade-in vehicle is not likely to exceed its scrap value. The law requires the dealer to disclose to the buyer an estimate of the scrap value of the traded-in vehicle.
Is This Program Only for American Cars?
No. Both domestic and foreign vehicles may be traded in, purchased, or leased.
References:
Car Allowance Rebate System Website – www.cars.gov
United States Code - TITLE XIII--CONSUMER ASSISTANCE TO RECYCLE AND
SAVE PROGRAM, Section 1302
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