What is the Car Allowance Rebate System?
The Car Allowance Rebate System is a new program from the government that
will help you pay for a new, more fuel efficient car or truck from a
participating dealer when you trade in a less fuel efficient car or truck.
What is NHTSA doing to
implement the program?
As required under the law, NHTSA will publish rules for the program in 30
days. We are currently working closely with manufacturers, dealers, and
disposal facilities to get a workable, effective program up and running.
Do I need to get a voucher
or sign up for this program?
No. You do not need a voucher and you are not required to sign up or enroll
in this program. Participating new car dealers will apply a credit, reducing
the price you pay at the time of your purchase or lease, provided the vehicle
you buy or lease and the vehicle you trade in meet the program requirements.
The dealer will then obtain reimbursement from the government.
How do I know if a dealer
is participating in the program?
The law requires dealers to be registered to participate in the program. We
will be moving as quickly as possible to register interested dealers as soon as
the registration process begins in the near future. As dealers are registered,
we will list them on this website. We will continue to update this list during
the life of the program. Meanwhile, you may wish to contact dealers in your
area to ask whether they plan to participate in the program. The CARS Act
requires that dealers be licensed by their respective state for the sale of new
automobiles in order for them to participate in the program.
How do I know if my car or
truck is an eligible trade-in vehicle?
There are several requirements (but you also have to meet certain conditions
for the car or truck you wish to buy). Your dealer can help you determine
whether you have an eligible trade in vehicle.
Your trade-in vehicle must
Note that work trucks (i.e., very large pickup trucks and
cargo vans) have different requirements.
How do I find out when my
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 do I find out the
combined city/highway fuel economy rating of my trade-in vehicle?
Go to http://www.fueleconomy.gov/feg/sbs.htm
and click on the model year of your 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 your vehicle. You may then enter the
make, model, and model year of a new vehicle you may want to buy and see its
combined MPG for comparison.
Does the program apply if I
want to lease a vehicle, or must I purchase a vehicle?
Under the program, you may purchase a new vehicle or lease a new vehicle,
provided the lease period for the new vehicle is at least five years.
Is there a cap on the price
of the vehicle I can buy or lease under the program?
Yes. The manufacturer's suggested retail price cannot exceed $45,000.
Does the program apply if I
want to buy a used car?
No. The program does not apply to the purchase of used vehicles.
What is the amount of the
credit?
The amount of the credit is $3,500 or $4,500, and generally depends on the
type of vehicle you purchase and the difference in fuel economy between the
purchased vehicle and the trade-in vehicle. Different requirements apply for work
trucks.
In addition to the credit,
will I get the full value of my trade-in vehicle?
No. The law requires your trade-in vehicle to be destroyed. Therefore, the value you negotiate with the dealer for your trade-in vehicle is not likely to exceed its scrap value. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle.
I don't drive an American car but I would like to
trade in my old car for a newer, more fuel efficient one. Is this program only
for American cars?
No. You may trade in or buy a domestic or a foreign vehicle.
I have a truck and I cannot
find its fuel economy rating. Is it an eligible trade-in vehicle?
Maybe. Some trucks, such as work trucks, were never rated for fuel economy.
For these trucks, age is the only criterion for determining whether they are
eligible trade-in vehicles. If you have one of these trucks, it must be from
model year 2001 or earlier, but also the date of manufacture must be less than
25 years from the date you trade it in, to be an eligible trade-in vehicle.
Other restrictions may also apply.
I just traded in my old car
for a new vehicle last month. Will I get some money back?
No. The program does not apply retroactively.
Is the credit subject to
being taxed as income to the consumers or dealers that participate in the
program?
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.
How can I find out when my
trade in 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 can I determine the
fuel economy of my trade in vehicle?
The CARS Act requires that, by July 24, NHTSA set up a location on the
program website, http://www.cars.gov,
to assist consumers in determining whether their vehicle is an eligible
trade-in vehicle. Until that part of the website is operational, consumers can
visit http://www.fueleconomy.gov/feg/findacar.htm
and search for their vehicle to find its combined fuel economy value. When
searching that website, consumers will need to know their vehicle's model year,
make, model, engine size, and transmission type. MPG requirements for model
year 1985 and newer vehicles are based on the Combined "Estimated New EPA
MPG" as given in the Find a Car section at www.fueleconomy.gov.
What new vehicles may be
acquired under the CARS program?
The CARS Act applies to new vehicles. Thus, used vehicles do not qualify
under the program.
The new vehicle must have a manufacturer's suggested retail price of not
more than $45,000. That price appears on the window sticker on new vehicles.
The new vehicle must also achieve minimum combined fuel economy levels. For
passenger automobiles, the new vehicle must have a combined fuel economy value
of at least 22 miles per gallon. For category 1 trucks, the new vehicle must
have a combined fuel economy value of at least 18 miles per gallon. For
category 2 trucks, the new vehicle must have a combined fuel economy value of
at least 15 miles per gallon. Category 3 trucks have no minimum fuel economy
requirement; however, there are special requirements that apply to the purchase
of category 3 vehicles.
As noted above, the CARS Act also requires that NHTSA make available on an
Internet website a comprehensive list of new vehicles that meet the
requirements of the program. Until that information is posted on the program's
website, consumers may determine whether a new vehicle meets the fuel economy
requirements of the program in two ways. First, the combined fuel economy of a
new vehicle will be posted under the heading "Combined Fuel Economy"
on the window sticker ("Monroney label") of a new vehicle. Second,
you may also find the combined fuel economy value of a new vehicle by visiting http://www.fueleconomy.gov/feg/findacar.htm
and searching for their vehicle to find its combined fuel economy value. When
searching that website, consumers will need to know their vehicle's model year,
make, model, engine size, and transmission type.
How
do I determine whether the vehicle I want to purchase or lease is a passenger
automobile or a category 1, 2, or 3 truck?
The CARS Act divides the eligible vehicles into four groups: passenger
automobiles; category 1 trucks; category 2 trucks; and category 3 trucks. NHTSA
will soon publish a list of the vehicles that fall into these groups. For the
present, we describe here the statutory definitions, give examples of types of
vehicles that satisfy those definitions, and refer readers to the large table
at the end of this notice.
The term "passenger automobile" and its definition are borrowed from the
fuel economy statute. The definition excludes from that term (1) vehicles that
NHTSA has determined are not manufactured primarily for transporting persons
and (2) vehicles that are capable of off-highway operation. Vehicles not
manufactured primarily for transporting persons include pickup trucks and
certain vehicles that permit expanded use of the vehicle for cargo-carrying
purposes. See 49 CFR 523.5(a). Under NHTSA's regulations (49 CFR 523.5(b)),
there are two groups of vehicles with capability of off-highway operation. The
first includes vehicles that have 4-wheel drive and have at least four out of
five specified physical characteristics relating to ground clearance. The second
includes vehicles that are rated at more than 6,000 pounds gross vehicle weight
and have at least four out of five specified physical characteristics relating
to ground clearance, but do not have 4-wheel drive. Passenger automobiles are
what are commonly known as passenger cars.
A category 1 truck is a nonpassenger automobile. This category includes
sport utility vehicles (SUVs), small and medium pickup trucks and small and
medium passenger and cargo vans.
A category 2 truck is a large van or a large pickup truck, based upon the
length of the wheelbase (more than 115 inches for pickup trucks and more than
124 inches for vans). Note: some pickup trucks and cargo vans exceeding these
thresholds are treated as category 3 trucks instead of category 2 trucks.
A category 3 truck is a work truck and is rated between 8,500 and 10,000
pounds gross vehicle weight. This category includes very large pickup trucks
(those with cargo beds 72 inches or more in length) and very large cargo vans.
By July 24, NHTSA will make available on an Internet website a comprehensive
list of the trucks that fall into these categories and meet the requirements of
the program.
What is the value of the
credit for the purchase or lease of a new passenger car?
The value of the credit for the purchase or lease of a new passenger car
depends upon the difference between the combined fuel economy of the vehicle
that is traded in and that of the new vehicle that is purchased or leased. If
the new vehicle has a combined fuel economy that is at least 4, but less than
10, miles per gallon higher than the traded-in vehicle, the credit is $3,500.
If the new vehicle has a combined fuel economy value that is at least 10 miles
per gallon higher than the traded-in vehicle, the credit is $4,500.
What is the value of the
credit for the purchase or lease of a new van, pickup truck or SUV?
The value of the credit given for the purchase or lease of a category 1 or 2
truck also generally depends on the difference between the combined fuel
economy of the vehicle that is traded in and that of the new vehicle that is
purchased or leased. If the new vehicle is a category 1 truck that has a
combined fuel economy value that is at least 2, but less than 5, miles per
gallon higher than the traded-in vehicle, the credit is $3,500. If the new
category 1 truck has a combined fuel economy value that is at least 5 miles per
gallon higher than the traded-in vehicle, the credit is $4,500.
If both the new vehicle and the traded-in vehicle are category 2 trucks and
the combined fuel economy value of the new vehicle is at least 1, but less than
2, miles per gallon higher than the combined fuel economy value of the traded
in vehicle, the credit is $3,500. If both the new vehicle and the traded-in
vehicle are category 2 trucks and the combined fuel economy of the new vehicle
is at least 2 miles per gallon higher than that of the traded-in vehicle, the
credit is $4,500. A $3,500 credit applies to the purchase or lease of a
category 2 truck if the trade-in vehicle is a category 3 (work) truck that was
manufactured not later than model year 2001, but not earlier than 25 years
before the date of the trade in.
What rules apply to new
work trucks?
A work truck, which is called a category 3 truck under the CARS Act, is
subject to special rules. Work trucks are not rated for fuel economy by the
EPA. Thus, the eligibility of work trucks for the program does not depend on
combined fuel economy. Instead, work trucks may only be traded in under the
program if they were manufactured not later than model year 2001 and not
earlier than 25 years before the date of the trade in. In addition, work trucks
may only be traded in for the purchase of a category 2 truck or another
category 3 truck that is of similar size or smaller than the traded-in vehicle.
Finally, the Act provides only for a $3,500 credit for trading in a work truck.
The CARS Act limits the amount of funds that can be used to provide credits
for purchases or leases of work trucks. Only 7.5 percent of the funds
appropriated for the program may be used for credits for work trucks. Once that
limit is reached, NHTSA will stop making payments for these transactions. NHTSA
will keep the public informed as to the funds that remain available for these
credits.
Can I use the credit in
combination with manufacturer rebates or discounts?
The CARS Act requires the dealer to use the credit under the CARS program in
addition to any rebates or discounts advertised by the dealer or offered by the
new vehicle's manufacturer. The dealer may not use the credit to offset these
rebates and discounts.
Can I combine this credit
with other government incentives?
Yes. You can combine this with other State and Federal incentives, such as
the hybrid vehicle credit. For information on this credit, go to http://www.fueleconomy.gov/Feg/tax_hybrid.shtml
May I receive or use more
than one credit under the CARS program?
No, the CARS Act specifies that not more than one credit may be issued to a
single person, not more than one credit may be issued for joint registered
owners of a single eligible trade-in vehicle, and that only one credit under
this program may be applied toward the purchase or lease of any single new
vehicle.
Can dealers charge me a fee
for buying or leasing a vehicle under the CARS program?
While dealers can charge their normal types of fees, the CARS Act
specifically prohibits dealers from charging a fee for purchasing or leasing a
vehicle under the program.
What will I need to bring
to the dealer in order to participate in the program?
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.
What happens to the vehicle
I trade in?
The CARS Act requires that the trade-in vehicle be crushed or shredded so
that it will not be resold for use in the
How and when will NHTSA
provide more details about the CARS program?
The rule implementing the CARS Act will provide specific detail regarding
the process for registering dealers, the manner in which dealers will be
reimbursed for eligible transactions, the requirements and procedures for
disposing of trade-in vehicles, and the means for enforcing the program's
requirements. NHTSA must issue those regulations on or before July 24, 2009,
legislation.
In the final rule, NHTSA will seek to balance the need to provide prompt
payment to dealers with the need to prevent fraud and preserve records for the
purposes of enforcing program requirements. NHTSA is meeting with a variety of
groups to ensure that a proper balance is struck. NHTSA will also need to set
up and staff a new office to administer the CARS program.
Why is fuel economy
important?
Buying a fuel efficient vehicle is important because it can: