CARS FREQUENTLY ASKED QUESTIONS Legislation has been enacted offering car buyers a $3,500 or $4,500 rebate between July 23 and November 1, 2009 for trading in an old, inefficient vehicle for one that’s new and more efficient. What is the Car Allowance Rebate System (CARS)? The Car Allowance Rebate System (HR 2751— Consumer Assistance to Recycle and Save Act) 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 a less fuel efficient car or truck is traded in. Government officials and the news media have often referred to this legislation as “Cash for Clunkers.” How does CARS work? 1. Determine if you qualify at the cars.gov Web site; then shop for a new car. 2. Bring the title, registration and insurance papers showing continuous registration and insurance coverage for the past full year. 3. When you buy or lease a new vehicle, the dealer handles the submission of all required information to NHTSA. 4. NHTSA ensures that your purchase meets the requirements. 5. About 10 days later, NHTSA will issue a financial credit to the dealer — assuming all program requirements have been met. How do I participate in this program? You can participate in this program by purchasing a new vehicle from a participating new car dealership. The incentive amount will be applied to the new vehicle purchase price or lease price rather than sent to you. Dealers must be registered for the program with the National Highway Traffic Safety Administration (NHTSA). NHTSA provides a list of participating dealerships and qualifying vehicles at the cars.gov Web site. 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. Does my trade-in vehicle qualify? To qualify, your trade-in vehicle must: • Be in drivable condition • Have been continuously insured consistent with state laws and registered to you for at least one year immediately prior to trade-in • Be manufactured less than 25 years before the date of the trade-in (For cars and light-duty trucks, this applies to 1984 and later; work trucks must have been manufactured between 1984 and 2001) • Have a combined mpg of 18 or less (larger GVWR trucks are age-based) Does the new vehicle I want qualify? The qualification of the new vehicle and the incentive amount depend upon the kind of vehicle you want to purchase, its mpg relative to your trade-in vehicle, and in some cases, the kind of vehicle you are trading in. In addition, the purchased vehicle must: • Be new (i.e., legal title has not been transferred to anyone) • Have a manufacturer’s suggested retail price of $45,000 or less Which Chrysler Group vehicles may qualify? • Chrysler: PT Cruiser, Sebring Sedan/Convertible, Town & Country, Aspen • Dodge: Caliber, Avenger, Journey, Nitro (2WD), Grand Caravan, Dakota, Ram LD/HD, Sprinter • Jeep : Compass, Patriot, Liberty (2WD), Grand Cherokee (2WD), Commander ® What is the amount of the rebate? The amount of the rebate 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. Use this chart as a general reference – complete details are available at cars.gov. New Vehicle Type Passenger Car Light-duty truck, SUV, or Minivan Large light-duty truck (6,000-8,500 pounds) Work truck (8,500-10,000 pounds) Minimum Fuel Economy for New Vehicle 22 mpg (EPA combined) 18 mpg (EPA combined) 15 mpg (EPA combined) $3,500 Voucher Mileage improvement of at least 4 mpg Mileage improvement of at least 2 mpg Mileage improvement of at least 1 mpg or trade-in of a work truck Trade-in must be at least pre-2002 $4,500 Voucher Mileage improvement of at least 10 mpg Mileage improvement of at least 5 mpg Mileage improvement of at least 2 mpg Details subject to change. How will this affect trade-in value? Under this program, your trade-in vehicle will be scrapped rather than resold by the dealer. Therefore, the new vehicle’s price will be reduced by the incentive amount instead of the amount the dealer would normally give you for trade-in. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle. 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 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. What if my vehicle is not listed in Find a Car? If your vehicle is a large truck or van with a Gross Vehicle Weight Rating (GVWR) of more than 8,500 lb, EPA fuel economy estimates for your vehicle do not exist because manufacturers are not required to provide mpg ratings for those vehicles. 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, and to be eligible, the vehicle’s date of manufacture must be less than 25 years from the date you trade it in. Other restrictions may also apply. 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. Does the program apply if I want to buy a used car? No. The program does not apply to the purchase of used vehicles. 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. Am I going to have to pay taxes on the allowance? No. The legislation specifically identifies that the CARS allowance is NOT to be identified as income by the IRS.