CARS Will Put Safer, Cleaner, More Fuel Efficient Vehicles on Road

Topics:  Car Allowance Rebate System (CARS)

National Highway Traffic Safety Administration
June 24, 2009

NHTSA 87-09
Wednesday, June 24, 2009
Contact: Jill Zuckman
Telephone: (202) 366-4570

U.S. Transportation Secretary Ray LaHood said his department stands ready to implement a new buyer incentive program signed into law today by President Obama which will help consumers pay for new, more fuel efficient vehicles when they trade-in a less fuel efficient car or truck.

“At this important time for the industry, we will help to boost automobile and truck sales while putting vehicles on the road that are safer, pollute less and get more miles to the gallon,” said Secretary LaHood.

Under the Car Allowance Rebate System (CARS), buyers stand to receive up to $4,500 toward the purchase or lease of a new car or truck that meets the necessary criteria.

For passenger automobiles, the car to be traded must be drivable, have a fuel economy rating of 18 miles-per-gallon or less, and be registered and insured for the full year prior to the trade in. To get a rebate, the new car must be priced at $45,000 or less, and, to receive the maximum rebate of $4,500, the new car must have a fuel economy rating of at least 10 miles-per-gallon greater than the car to be traded. To receive an incentive of $3,500, the same car would be traded for one that gets at least four miles-per-gallon better gas mileage.

For most vans, SUVs and pickups, the vehicle to be traded must have a fuel economy of 18 miles-per-gallon or less. To receive an incentive of $3,500, the new vehicle must get at least two miles-per-gallon better mileage. To receive the $4,500 incentive, the same vehicle would need to be traded for one getting at least five miles-per-gallon better mileage.

The purchaser does not receive the money directly from DOT. Instead, the dealer reduces the purchase or lease price by the allowed amount, and the government reimburses the dealer for that amount.

The incentive program begins within 30 days of today's bill signing by the President. The final day for an eligible purchase or lease is November 1, 2009, or when DOT exhausts the funds set aside for the program, whichever occurs first. The credit is not retroactive prior to the start of the program and cannot be applied toward the purchase of used vehicles.

To achieve the objective of removing older, less efficient vehicles from the roads, vehicles traded under this program will have to be permanently disabled and/or scrapped.

CARS will be implemented by the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA).

Consumers can learn more about CARS or the gasoline mileage attained by individual vehicles, at www.cars.gov or by calling NHTSA's Vehicle Safety Hotline at 1-888-327-4236.