Cash for Clunkers (Car Allowance Rebate System – CARS) Update

The Car Allowance Rebate System (CARS), more commonly known as cash for clunkers, would allow auto buyers a chance to earn up to $4,500.00 credit on the purchase or lease of a new vehicle. Here are the facts about the program and what you need to know before you sign on for a new car loan.

Cash for Clunkers FAQ

1. What is CARS?
President Obama signed a law that would give consumers a rebate of up to $4,500.00 towards the purchase of a newer, more fuel efficient vehicle when they trade in their old, less efficient vehicles.

2. When does the program start?
Transactions on or after July 1 are eligible for the rebate to be applied towards the purchase or lease of a new car – no vouchers are necessary as the dealership will be reimbursed by the government directly. You may want to wait until July 24 to see the final regulations and issuance of the bill before making a car purchase.

3. When does the program end?
The CARS program will end when government funds allotted for the program run out, or Nov 1, whichever comes first.

4. What are the requirements for my trade-in?

• Your car must be less than 25 years old at the trade-in date
• Must get 18 or less MPG (large trucks and vans have different requirements)
• Must be registered and insured consistently for a full year prior to trade-in

5. What cars are eligible for the credit/rebate?
All new vehicles that are obtained by lease or purchase will qualify.

6. Will I need a voucher or coupon to present to the dealership?
No. You do not need a voucher or coupon, and the dealership will handle all the paperwork.

7. Who will handle the documented paperwork involved?
When buying or leasing a new vehicle, the dealer will handle all the necessary paperwork between themselves and the NHTSA.

8. What else do I need to know?
The dealership is required to disclose the estimate amount for the scrap value of your trade-in.

Official CARS Program Steps

1. Visit the official CARS website

2. Determine if you qualify, then begin researching your new car purchase

3. You need to bring the title, continuous registration, and insurance showing a full year of coverage

4. Purchase your vehicle and the dealer is responsible for handling all NTHSA compliance documents

5. After 10 days, a federal credit will be issued to the dealership assuming all requirements have been met

For more frequently asked questions, please visit with the official CARS website.

Are you interested in purchasing a new car? Don’t let the excitement of getting rid of your old clunker and a hefty government credit hurt allow you to make rushed decisions. Make sure you are still securing your financing ahead of time in order to get the best automobile loan rates possible. Go Banking Rates can help.