FAQ

We have received numerous emails with questions about what the House and Senate has called the “Cash for Clunkers” bill. The term “Cash for Clunkers” is what America and the news media has used to describe a “credit” program to purchase new fuel efficient cars for the past six months.

The language in Cash for Clunkers bill gave the NHTSA the authority to implement the cash rebate system within 30 days from the bill being signed by the President. The official name for the program is called “Car Allowance Rebate System” (CARS). The only official website for the program is http://www.cars.gov.

The official rules and conditions for participation in the CARS program are outlined on the official NHTSA website. The information presented on this page is for informational use only based on questions we have received. CARS program rules may change at any time so the http://www.cars.gov is the only definitive source for answers.

This website is created by consumers for consumers who have questions on the CARS program. This is not a government website.

If you don’t qualify and want to sign an online petition to request changes in the wording of the bill if additional funding is needed, visit: http://www.nocashforclunkers.com

We have taken the best questions submitted by consumers around the country and provided answers that we believe reflect the information provided on the CARS website as well as the text of the bill. Consumers will have to validate all answers with their local dealer once the program starts or visit http://www.cars.gov.

If you have additional questions, after reading this page carefully, send us an email. Send Us an Email . If your email question is answered on this sheet, you will not receive a response.

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Q: Can individuals, corporations or partnerships participate in CARS program?

A: Yes, according to the FINAL RULES:

“The CARS Act uses the term “person” to describe those eligible to purchase or lease a new vehicle under the Program. See Sections 1302(c-d). In the absence of a definition of this term in the CARS Act, the agency relies on the universal definition that appears in 1 U.S.C. 1, which includes corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals.

The agency adopts this definition for the term “person” in Section 599.102, and also defines a “purchaser” in that section as a person purchasing or leasing a new vehicle under the CARS program. Of course, each person is subject to the statutory restriction that precludes participation by any person in this program more than once.”

Q: Are there updated conditions on the bill?

A: Heare a a few updates we know from the Final Rule published on 7/24/2009:

1. The purchased vehicles, which must be new (2008, 2009, 2010 models)
2. The vehicle can not cost more than $45,000.
3. The vehicle must be purchase between July 1, 2009 and November 1, 2009 to qualify.
4. Motorcycles are not part of the trade-in or sales process.
5. Your clunker has to be in driveable condition.
6. You must have a clear title to present to the dealer; no liens.
7. The person on the title of the clunker has to be the same person who is buying the new car. (pg 9)
8. The EPA mpg ratings on fueleconomy.gov is what is being used; no exceptions

Q: Where can I read a copy of the Final Rules?

A: Click here to read PDF: Click Here

Q: How do I find the combined EPA mileage estimates on my old clunker?

A: The NHTSA on July 25, 2009 updated the way in which you can see if your vehicle qualifies. Go to www.cars.gov and click on the “fueleconomy.gov” tab. You can click on the image on the right here to read our tutorial.

Q: Do I have to pre-qualify?

A: No. Your car only has to be qualified for the program. You can check if it qualifies on http://www.fueleconomy.gov. The CARS program does not require consumers to submit their information on the http://www.cars.gov website.

Q: Which dealers will be participating in the Car Allowance Rebate System (CARS)?

A: Most new cars dealers in the USA will participate. They will have to register with the NHTSA starting on July 24, 2009. Registered dealers will be eventually listed on http://www.cars.gov.

Q: How will the government limit fraud with CARS transactions?

A: The NHTSA is taking full compliance with program rules seriously. Car dealers will first have to register at http://www.cars.gov and be authenticated for the new car brands that they sell. Dealers will be responsible for following all guidelines set by the NHTSA and severe penalties will be issued for anyone who is committing fraud during the trade-in process or during the salvage process.

Q: What do I need to bring to the new car dealership when I bring in my trade?

A: You should bring documentation establishing the identity of the person who currently owns the vehicle, preferably the title of the vehicle, and documentary proof that the vehicle “has been continuously insured consistent with the applicable State law and registered to the same owner for a period of not less than 1 year immediately prior to the trade-in.” The final rule will specify what types of documentation would be acceptable.

Q: Does the Cash for Clunkers bill apply to used car purchases?

A: Currently, the language of the proposed bill is only for new car purchases. If you are looking for a used car, click here.

Q: Is the value of the voucher tax-free to the consumer?

A: Yes. The CARS Act expressly provides that the credit is not income for the consumer. However, the credit will be considered as income for the dealer.

Q: Is there an income limit that disqualifies certain vehicle owners?

A: No.

Q: If I already purchased a new car, in the last few months, can the voucher apply to my past purchase?

A: No. Car purchases made prior to the official start date will not qualify.

Q: If my car is worth more than $4,500, how would the Cash for Clunker credit work?

A: The program would not provide any benefit if a car dealer would give you more than $4,500 for your trade-in. If you want to purchase a new car, do not wait on this bill if your trade is worth more than $4,500 since it will not provide any upside relief.

Q: If dealers are offering cash incentives toward a new car purchase, would that be in addition to this credit?

A: The CARS credit is independent from manufacturer buying incentives. For example, if a car dealer is offering $3,000 off the list price of a car and you qualified for a $4,500 CARS credit from your trade-in, then the total reduction off the MSRP would be $7,500. You should always shop for the best deals before buying a car.

Q: I have a car that qualifies for the cash for clunkers rebate but I still owe money on the title. Will this still work with the rebate? Can the cash rebate help pay off the title when I trade it in for a new purchase? It is registered and insured of course. I would like to get out from under this car loan and get a car with better gas mileage as required.

A: Right now the NHTSA is saying that the TITLE has to be clear of any liens. So if you owe less than what you will get for your clunkers trade in, you may want to consider paying off the lien and getting a clear title.

Q: I have two old clunkers, can I trade-in both cars for a $9,000 credit toward a new car purchase?

A: The current wording of the bill would seem to indicate that only one CARS credit can be applied to a new car purchase.

Q: How do I know if my car qualifies for a $3,500 or a $4,500 CARS credit?

A: Click on this link to get your EPA mileage estimates from the Federal website: Click on this link: http://www.fueleconomy.gov. If you car gets a combined miles per gallon of 18 mpg or less, you can qualify as long as the car is not more than 25 years old. Your CARS credit amount would then be determined by the new car you purchase. Trucks have different rules.

Q: How do I find a CARS Participating Dealer?

A: Once the registration process is established for car dealers, the official list will be posted on http://www.cars.gov. Most dealers in your area should be participating that sell new cars. You can call any dealer yourself.

If your clunker qualifies and you want to purchase a new car, complete the form on the left. We will have a local dealer in your state contact you and get all your trade-in information validated.

Q: What years constitute a “new” vehicle that qualifies for CARS credit?

A: According to the CFC Bill PDF, on page 7 item number 5B, vehicles of model year 2008 or later qualify. In most states that also means that the car was never previously titled.

Q: Can I go to the junkyard and buy an old car and use it for a trade?

A: You have to have owned the car for a year and show continuous registration and insurance for the clunker you trade in. Sp any recent car purchases, trades or transfers would not qualify.

Q: What will happen to the car I trade in?

A: The car will be sent to the salvage yard. Some parts may be kept but the engine and drive-train must be destroyed. Specifically the engine will be injected with a liquid glass solution to permanently disable the engine and it will be the responsibility of the dealer to make sure this is done to the engine.

Q: My car is old and originally was rated a 21 mpg, but now it gets 14 mpg. Will it qualify?

A: The program is based on the “combined” mpg estimates, a number in red, found on this link: http://www.fueleconomy.gov. If the number for your “car” is 18 mpg or less, you can qualify if you meet all the other conditions.

Q: How long will the program last?

A: Right now the CFC program will most likely run from July 24th through November 1, 2009. There is no guarantee that the program will not run out of money sooner. We predict that without additional funding, the program will be out of money by September.

Q: Are there restrictions on the year of my trade-in.

A: The car can not be more than 25 years old.

Q: Why would some trades qualify for $3,500 and other trades get $4,500?

A: The difference in vouchers depends on the improved gas mileage of your new car compared to your trade. For example, if your new car purchase gets 4 mpg more than your trade you get a $3,500 credit. If the new car gets 10 mpg better than your trade you get $4,500 credit.

Q: What if my trade-in is worth more than $4,500?

A: This program does not apply to you because you will be better off trading the car in through traditional channels. All cars that are part of the CARS program will be sent to the scrapyard.

Q: I have an old clunker truck that gets under 18 mpg. Can I trade that in for a car that gets over 22 MPG?

A: It would seem that you will be able to trade it in. We will wait on the final wording on the bill since this is a very popular question.

Q: My parents own an old clunker. Can I transfer the title into my name and use it for a Cash for Clunkers trade-in?

A: According to Page 9 of the final rule published on July 24, 2009:

“Questions have arisen as to which persons are eligible to participate in the program and whether a person can trade in a vehicle owned by someone else, such as a family member. The agency has concluded that individuals as well as legal entities, such as corporations and partnerships, may participate in the program. However, a person may not trade in a vehicle owned by someone else under the program. The Act’s one-year insurance requirement is satisfied so lon g as the trade-in vehicle is insured, irrespective of the identity of the person holding the insurance policy. The specifics of these requirements are explained later in this document. “

Q: Can I buy any new car and still qualify? Does it have to be an American manufacturer?

A: You can buy any new car: foreign or domestic.

Q: Can I lease a car or do I have to purchase/finance it?

A: Qualifying leases must be at least 5 years long. You can finance the car under any term you qualify for.

Q: Do you have to have good really good credit? If so, what does your credit score need to be in order to qualify ?

A: The CARS program is not linked to any credit approval process. You will have to qualify for a new car purchase based on your personal credit and the bank loan requirements at the dealer you visit. The CARS credit acts like a cash down payment. The rest of the approval process is between you and the new car dealer.

Bonus Assistance

Q: How can I find out the current EPA MPG estimates for the car I drive?

A: Visit: http://www.fueleconomy.gov

Q: Did Kevin Jonas get engaged?

A: Yes. See www.kevinjonasengaged.com

Disclaimer

* All questions and answers are subject to a final determination by your local car dealer. This website cannot provide definitive answers on the CARS program. If you have any questions that will impact your purchasing decision, please contact http://cars.gov or a local participating car dealer.

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