With the overwhelming popularity of the Cash for Clunkers program, the government is making a number of changes to the Car Allowance Rebate System (CARS.) Here are a number of updates for those who still want to take advantage of this program.

New CARS (Car Allowance Rebate System) Guidance and Clarification

In response to overwhelming interest in the CARS program, the NHTSA (National Highway Traffic Safety Administration) has clarified that consumers who want to purchase new vehicles not yet on dealer lots can still be eligible for the CARS program. Dealers and consumers who have reached a valid purchase and sale agreement on a vehicle already in the production pipeline will be able to work with the manufacturer to receive the documentation needed to qualify for the program.

Several other areas have also been clarified. Apparently there have been some consumers who were told by dealers to sign a contingency agreement to pay back the rebate amount if their transactions were rejected by the government as not qualified. This is simply not correct. According to cars.gov, consumers are not required to sign contingency agreements to pay back the dealer should the CARS credit be rejected. The rebates of either $3,500 or $4,500 that consumers get for trading in qualified older cars for qualified new cars are guaranteed by the government, and there are specific things that both the consumers and dealers must do. Here’s a summary of how the Cash For Clunkers works:

• Step 1. Visit cars.gov for current information about the program.
• Step 2. Determine if you qualify and what you need to bring to the dealer, using how to qualify link.
• Step 3. Shop for a new car as you would normally. When you buy or lease a new vehicle, the dealer handles the submission of all required information to the NHTSA.
• Step 4. The NHTSA ensures that your purchase meet all requirements of the program.
• Step 5. Within 10 days or so, the NHTSA will issue a financial credit to the dealer, again assuming all program requirements have been met.

So the best way to stay out of trouble is for consumers to be informed. Also, if the dealer has the new car in stock, the dealer must allow you to take possession of the new car before the dealer may submit the credit application to the government. If you have a problem regarding this issue with a dealer, call the CARS Hotline (866) CAR-7891 or (866) 227-7891.

Important Information on new MPG Ratings

In conjunction with the CARS final rule, the EPA updated fuel economy data on fueleconomy.gov on July 24th. The changes affected the eligibility of certain vehicles under the CARS program.

Of the 30,000 vehicle model types spanning 25 years, 78 cars no longer qualify, but 86 new vehicles are now eligible.

NHTSA will process transactions in accordance with the data on fueleconomy.gov. The 78 vehicle model types that were eligible under EPA’s mileage criteria until EPA’s revisions were issued on July 24th will continue to be considered as eligible for transactions that occurred on or before July 24th.

The 86 model types that became eligible on July 24th will be treated as eligible if they are part of sale or lease that occurred on or after July 24th.

To see if your car is qualified, visit the CARS vehicle eligibility guide.

Here’s a clip from CNN on the new and improved, or latest Cash for Clunkers program. Don’t miss the Maserati clunker segment.

http://www.youtube.com/watch?v=a7pIB71j0Yo

Ron Paul with an alternative view on Cash For Clunkers.

http://www.youtube.com/watch?v=k7uOIm9TdQs

New and Improved Cash for Clunkers Program? is a post from: CleanCarTalk

Note to readers: Beware of scams already popping up to take advantage of the CARS of “cash for clunkers” program. Never give out personal information on a website, especially your social security number. Your only trusted source should be www.cars.gov.

Ray LaHood, Secretary of Transportation, discusses the Car Allowance Rebate System (CARS,) or “Cash for Clunkers” program. According to the Secretary LaHood, it’s all about moving cars out of the showrooms, and the net result will be to help stimulate jobs in the U.S. – “One billion dollars will buy 250,000 cars.”

Obviously there’s no perfect program, and I think the Secretary could have addressed some key questions and concerns about the effectiveness versus the cost of the CARS, but he avoided doing so.

CNN interviews Secretary of Transportation Ray LaHood. Video clip courtesy CNN, 07-27-09.

http://www.youtube.com/watch?v=vWTfoXHjqiQ

Secretary of Transportation Ray LaHood on the Car Allowance Rebate System (CARS,) or “Cash for Clunkers” Program is a post from: CleanCarTalk

Note to readers: Beware of scams already popping up to take advantage of the CARS of “cash for clunkers” program. Never give out personal information on a website, especially your social security number. Your only trusted source should be www.cars.gov.

The U.S. Department of Transportation’s National Highway Traffic Safety Administration released the final eligibility requirements for the Car Allowance Rebate System (CARS).

This final rule sets forth requirements and procedures for the voluntary vehicle trade-in and purchase/lease program under the Consumer Assistance to Recycle and Save Act of 2009. This program helps consumers pay for a new, more fuel efficient car or truck from a participating dealer when they trade in a less fuel efficient car or truck. The rule establishes a process by which dealers can register in order to participate in the program and establishes the criteria this agency will use to determine which disposal facilities are eligible to receive and either crush or shred the trade-in vehicles. It also sets forth the criteria that trade-in vehicles and new vehicles must meet in order for purchases and leases to qualify for assistance under this program and establishes the requirements that must be met by consumers, dealers, disposal facilities and others. Finally, the rule sets forth enforcement procedures and provisions for punishing fraud and other violations of the program requirements.

View the full CARS final rule document in pdf.
To find dealers in your area, use the CARS Dealer locator.

Cash for Clunkers program explained. Video clip courtesy CNN, 07-27-09.

http://www.youtube.com/watch?v=zrIQp4JR4nY

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NHTSA, DOT Publish the Final Rule for Car Allowance Rebate System (CARS) or Cash For Clunkers is a post from: CleanCarTalk

Note to readers: Beware of scams already popping up to take advantage of the CARS of “cash for clunkers” program. Never give out personal information on a website, especially your social security number. Your only trusted source should be www.cars.gov.

Updated 07-28-09. The Car Allowance Rebate System (CARS,) or “Cash For Clunkers” program as some in the press like to call it, is the federal program that helps consumers purchase a new, more efficient vehicle when an older, less efficient vehicle is traded in. All transactions made on or after July 1, 2009 are eligible under the CARS program, and many dealers have already registered with the National Highway Traffic Safety Administration (NHTSA) to offer these credits directly to consumers.

The credit received by consumers will not be treated as reportable income for tax purposes. In other words, it is tax-free. Dealers, on the other hand, will have to report it as an income.

The Facts

Here’s a quick run-down of important things about the CARS program you should know, from the government’s official website www.cars.gov:

• 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 miles per gallon or mpg (some very large pick-up trucks and cargo vans have different requirements)
• 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 program requires the disposal of your eligible trade-in vehicle and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate.

Here are some specific requirements of the CARS program:

• Your trade-in vehicle must
  • have been manufactured less than 25 years before the date you trade it in
  • have a “new” combined city/highway fuel economy of 18 miles per gallon or less. Use this site http://www.fueleconomy.gov/feg/sbs.htm to find your car’s combined city/highway fuel economy. It’s the red mpg number under the red banner “Estimated New EPA MPG” in the graphic below. UPDATED 07-28-09: You now need to find your eligibility here: http://www.fueleconomy.gov/feg/CarsSearchIntro.shtml
  • be in drivable condition
  • be continuously insured and registered to the same owner for the full year preceding the trade-in
  • The trade-in vehicle must have been manufactured not earlier than 25 years before the date of trade in and, in the case of a category 3 vehicle, must also have been manufactured not later than model year 2001
  • Work trucks and cargo vans have different requirements
• Consumers can either buy or lease a new car, as long as the lease period is at least for 5 years. Used cars are eligible.
• Both domestic and foreign made cars are eligible.
• The manufacturer’s suggested retail price for the new car cannot exceed $45,000.
• New passenger cars to be purchased must have combined fuel economy of 22 mpg; Category 1 or class 1 trucks (up to 6,000 lbs GVWR, Gross Vehicle Weight Rating,) 18 mpg; Category 2 trucks (6,001 to 10,000 lbs,) 15 mpg; and Category 3 trucks (10,001 to 14,000 lbs), no specific minimum mpg requirements but other restrictions apply.
• The law requires your trade-in vehicle to be scraped (destroyed.)

The Upsides

So what are the amounts of the credit and how are they determined. Purchasers of new qualified cars are eligible to receive either $3,500 or $4,500 credit.

• $3,500 credit. Consumers receive this amount if the new car’s combined mpg is at least 4, but less than 10 mpg, higher than the old car’s.
• $4,500 credit. Consumers receive this amount if the new car’s combined mpg is at least 10 mpg higher than the old car’s.

I’m sure many consumers will jump on this deal because these are some very attractive discounts on top of any other discounts, incentives and special offers made available by dealers and manufacturers. Expect dealer showrooms to have increased traffic between now and November 1. Also expect to see fewer polluting cars on the roads.

The Downsides

So is there a downside to this law? I can think of at least a couple.

One, low income people won’t be benefitting from the Cash for Clunkers program because they can’t afford a new car anyway. Not surprisingly, they are the largest population driving clunkers.

Two, the charity industry (which is very active in the older car sales and auction trade) will probably lose out because traded in cars (all of which are still operational by law) will all head for the scrap yards. As environmentally undesirable as they are, some poor families can still use them to maintain their livelihood. So again the poor lose out.

For  the latest information on the CARS program, follow this link to view helpful Q&As for consumers.

By the way the smart fortwo also qualifies for this “cash for clunkers” program.

Car Allowance Rebate System (CARS) or Cash For Clunkers Program Kicking Into Gear is a post from: CleanCarTalk