AS the C.A.R.S deadline for program launch looms near, (JULY 24th) there are no official notifications of dealership registration lines, websites or designated salvage yards. Dealers and consumers are wondering what to do, as 0% interest rates and huge lot clearing rebates disappear with the remaining 2009 model year close-outs. So here is the actual article from the NHTSA website, NHTSA acting with EPA are responsible for overseeing this program until November 1st, 2009 or when the $1 Billion dollars in federal funding runs out, whichever comes first… On June 24, the President signed the Consumer Assistance to Recycle and Save Act of 2009 into law.(3) require that dealers use the credit as an addition to, instead of as a substitute for, other rebates and discounts advertised by the dealer or offered by the manufacturer;
1 The Act directs NHTSA to set up a program in which owners of vehicles meeting statutorily specified criteria may receive a monetary credit for trading in their vehicle and purchasing or leasing certain new vehicles. If all of the conditions of eligibility are met, NHTSA would make an electronic payment to the dealer equal to the amount of the credit after the dealer provides NHTSA with sufficient documentation relating to the transaction. The vehicle that was traded in would then be disposed of (i.e., crushed or shredded) in a manner that ensures it would never be used again, although parts of the vehicle, other than the engine block and drive train,2 may be sold prior to disposal.The Act requires NHTSA to issue final regulations implementing the CARS Act within 30 days after the enactment of the Act, i.e., by July 24. The nearness of this statutory deadline precludes the issuance of a notice of proposed rule-making seeking public comment. The regulations must, among other things:
(1) set up a means for registering dealers to participate in the program;
(2) set forth the procedures for reimbursing dealers participating in the program;
(4) require that dealers disclose to the person trading in an eligible vehicle the best estimate of the scrappage value of such vehicle and authorize dealers to retain $50 of the amount paid for the scrappage value as payment for the administrative costs of the program;
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2. Under certain conditions, which are explained later in this notice, the drive train too may be sold. 3
1. The CARS Act is part (Title XIII) of the Supplemental Appropriations Act, Public Law 111-32, 123 Stat. 1859.
Allocation of any remaining scrappage fees is subject to negotiation between the dealer and purchaser. 3(5) establish, in consultation with the Environmental Protection Agency (EPA), requirements and procedures for the disposal of eligible trade-in vehicles; and
(6) provide for a means to enforce penalties for violations of the program requirements.
NHTSA must also, not later than July 24, and in consultation with the EPA, make available on an Internet website information about the program, including instructions on
What is the CARS program?
- how to determine if a vehicle is an eligible trade-in vehicle;
- how to participate in the program;
4. The Car Allowance Rebate System is a new program from the government that will help you pay for a new, more fuel-efficient vehicle from a participating dealer when you trade in a less fuel efficient one. When does the CARS program begin; how will NHTSA handle trade-ins that are made between July 1 and the issuance of the final rule?
If dealer choose to structure a transaction before the final rule is issued, they will bear the risks associated with later demonstrating that the transaction meets all of the specifications of the final rule. The dealers should also give the credit to the consumer at the time of such transaction. The dealer would be reimbursed by NHTSA later if the dealer registers and submits documentation sufficient to demonstrate that the transaction was an eligible one, that the traded-in vehicle was properly disposed of, and that all requirements in the final rule were met.While the CARS Act makes transactions on and after July 1 potentially eligible for credits under the CARS program, interested dealers and consumers may want to wait until all of the detailed issues that must be addressed in the implementing regulations are resolved and the final rule is issued. Issuance will occur around July 23. At that point, NHTSA will have in place detailed provisions about establishing eligibility and a system to ensure the prompt payment of money for credits used under the CARS program.
When does the CARS program end?
The CARS Act provides two limitations on the duration of the program. First, the program ends November 1, 2009. Second, NHTSA has been appropriated a fixed sum of money ($1 billion) to fund the program. Thus, under current law, the program will end on November 1, 2009, or when the appropriated funds are exhausted, whichever occurs first. Consumers and dealers are advised that, in the event NHTSA exhausts funds before the end of the program, 5
NHTSA will be unable to reimburse dealers for some otherwise eligible transactions, even if the transactions have already occurred. NHTSA will develop a method of providing consumers and dealers with information regarding the amount of remaining program funds.
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