Federal CARS Act takes effect

AMES, Iowa – July 2, 2009 - On June 24, President Obama signed into law the Consumer Assistance to Recycle and Save (CARS) Act of 2009. The Iowa Department of Transportation (DOT) is directing Iowa dealers and consumers interested in the program to the National Highway Traffic Safety Administration (NHTSA), the federal agency responsible for implementing the act.

CARS will provide a qualifying vehicle owner a monetary credit for trading in their less fuel-efficient vehicle and purchasing or leasing a new, more fuel-efficient car, van, sport utility vehicle or pickup truck from a participating dealer. NHTSA will provide an electronic payment to the dealer equal to the amount of the credit, after the dealer provides NHTSA with the required documentation.  

The vehicle that was traded in will then be disposed of (i.e. crushed or shredded) in a manner that insures it will never be used again. However, parts of the vehicle, other than the engine block and drive train, may be sold prior to disposal.

While the CARS Act makes transactions on and after July 1 potentially eligible for credits under the CARS program, NHTSA is recommending that dealers and consumers wait until the agency has had an opportunity to set up the program. NHTSA is required to publish rules for the program in 30 days (by July 24). They are currently working closely with manufacturers, dealers, and disposal facilities to get a workable, effective program up and running.

Federal regulations must, among other things:

• Set up a means for registering dealers to participate in the program.
• Set forth the procedures for reimbursing dealers participating in the program.
• Require dealers use the credit as an addition to, instead of a substitute for, other rebates and discounts advertised by the dealer or offered by the manufacturer.
• 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.
• Establish, in consultation with the Environmental Protection Agency (EPA), requirements and procedures for the disposal of eligible trade-in vehicles.
• Provide 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 the Internet information about the program, including instructions on how to:

• Determine if a vehicle is an eligible trade-in vehicle.
• Participate in the program.
• Determine if a dealer is participating in the program.

The law requires motor vehicle dealers to be registered to participate in the program. NHTSA will be moving to register interested dealers as soon as the registration process is established. As dealers are registered, they will be listed on the NHTSA Web site. Meanwhile, Iowans may wish to contact dealers in their 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 to participate in the program.

##

For more information:

NHTSA established a Web site, www.cars.gov, to provide overview information about the program. The agency will periodically update that information. To address additional questions, contact NHTSA at 866-CAR-7891; Monday-Friday, 7 a.m. to 9 p.m. CDT; and Saturdays 9 a.m. – 7 p.m. (CDT). 

The CARS Act is part (Title XIII) of the Supplemental Appropriations Act, Public Law 111-32, 123 Stat. 1859.