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New and Improved Cash for Clunkers Program?

By • Aug 15th, 2009 • Category: Clean Car Talk Daily Snapshots, Videos

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.

Ron Paul with an alternative view on Cash For Clunkers.

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Tagged as: cash for clunkers, fuel economy, national highway traffic safety administration

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2 Responses »

  1. So the idea is to negotiate a deal for a 2010 or 2011 model car today since you only need to have the agreement in place before the deadline passes? That sounds like a big loophole to me.

    http://www.driv4.com

  2. @Cars. I wouldn’t call it a loophole, because the reading on the cars.gov site seems to indicate “vehicle already in the production pipeline” but not yet on the dealer lot. So we’re talking essentially cars that are coming to the market with VIN and everything else a real car would have. The 2010 or 2011 models you mentioned, if they’re not already “in the production pipeline” then they wouldn’t qualify. The only thing about this is you wouldn’t know about any car in production pipeline unless the dealer tells you about it. You certainly can’t find out from any other source.

So what's your view? Write a comment below.