Download - CARS Car Allowance Rebate System Webinar NADA Members July 7, 2009 Webinar NADA Members July 7, 2009
CARSCARSCar Allowance Rebate SystemCar Allowance Rebate System
WebinarNADA Members
July 7, 2009
WebinarNADA Members
July 7, 2009
The LawThe Law
President Obama signed the Consumer Assistance to Recycle and Save Act on June 24
Establishes program within NHTSA to provide government funds to facilitate purchase or lease of new fuel-efficient vehicle in return for trade-in that is less fuel-efficient
President Obama signed the Consumer Assistance to Recycle and Save Act on June 24
Establishes program within NHTSA to provide government funds to facilitate purchase or lease of new fuel-efficient vehicle in return for trade-in that is less fuel-efficient
NHTSA’s DutiesNHTSA’s Duties
Issue a final rule in 30 days (by July 24) setting out requirements for participation and disposal of trade-ins
Create an Internet Web site within 30 days to provide program information
Develop a system for dealer registration
Develop a system for processing transactions
Develop a new organization within NHTSA to run program
Prevent fraud; penalize violations
Issue a final rule in 30 days (by July 24) setting out requirements for participation and disposal of trade-ins
Create an Internet Web site within 30 days to provide program information
Develop a system for dealer registration
Develop a system for processing transactions
Develop a new organization within NHTSA to run program
Prevent fraud; penalize violations
Progress by NHTSAProgress by NHTSA
Web site established June 19: www.cars.gov; basic information and frequent updates
Retained contractor to design registration and transaction system
Obtained dealer registration data from OEMs
Retained contractor to operate transaction review process
Drafting rule so as to meet July 24 deadline
Retained contractor to design registration and transaction system
Obtained dealer registration data from OEMs
Retained contractor to operate transaction review process
Drafting rule so as to meet July 24 deadline
Consumer InformationConsumer Information www.cars.gov permits consumers to find EPA
mpg data (link to www.fueleconomy.gov) and learn basics of program
Will soon contain list of eligible vehicles Will contain list of registered dealers
Vehicle hotline expanded Added 866-CAR-7891
Ongoing media outreach Use press to disseminate information Warn against fraudulent sites
Ad campaign being developed TV, radio, Internet, print Materials available for dealer use
Will soon contain list of eligible vehicles Will contain list of registered dealers
Vehicle hotline expanded Added 866-CAR-7891
Ongoing media outreach Use press to disseminate information Warn against fraudulent sites
Ad campaign being developed TV, radio, Internet, print Materials available for dealer use
Program DatesProgram Dates
Law says rebates limited to transactions between July 1, 2009, and November 1, 2009
Program will end when funds are exhausted, even if before November 1
Law also says NHTSA has 30 days to issue rules to implement the program, and NHTSA will need all of that time to complete rule
Deals made on or after July 1 risky for dealer because transaction may not meet all specifications; NHTSA not authorized to pay unless requirements met
Law says rebates limited to transactions between July 1, 2009, and November 1, 2009
Program will end when funds are exhausted, even if before November 1
Law also says NHTSA has 30 days to issue rules to implement the program, and NHTSA will need all of that time to complete rule
Deals made on or after July 1 risky for dealer because transaction may not meet all specifications; NHTSA not authorized to pay unless requirements met
Program BasicsProgram Basics
Customers trading in an eligible vehicle receive monetary credit toward purchasing or leasing a new eligible vehicle
If conditions are met, NHTSA makes an electronic payment to the dealer
Trade-in vehicle must be crushed or shredded
Customers trading in an eligible vehicle receive monetary credit toward purchasing or leasing a new eligible vehicle
If conditions are met, NHTSA makes an electronic payment to the dealer
Trade-in vehicle must be crushed or shredded
Registration ProcessRegistration Process
Dealer lists provided by OEMs in early July
NHTSA’s contractor will send each dealer a registration letter starting in mid-July
Dealer will follow instructions in letter to complete registration process
Dealer will certify to abide by program rules and inform NHTSA of change in license or franchise
System hopefully ready to begin registration by July 24
Submission of financial information completes registration
2-3 day process, confirmation of tax ID and bank or financial institution information
Dealer lists provided by OEMs in early July
NHTSA’s contractor will send each dealer a registration letter starting in mid-July
Dealer will follow instructions in letter to complete registration process
Dealer will certify to abide by program rules and inform NHTSA of change in license or franchise
System hopefully ready to begin registration by July 24
Submission of financial information completes registration
2-3 day process, confirmation of tax ID and bank or financial institution information
Transaction ProcessTransaction Process
Registered dealer will have online access to CARS transaction system
For each transaction, dealer will provide essential information using an online form: buyer info, VINs, mpg of each, etc.
Submission will include attachments: registration, insurance proof, title, certification from disposal facility, deal sheet showing MSRP, salvage value, all rebates, etc.
NHTSA will review all submissions, reject those that are incomplete or incorrect, and send payment on those that meet all requirements
Registered dealer will have online access to CARS transaction system
For each transaction, dealer will provide essential information using an online form: buyer info, VINs, mpg of each, etc.
Submission will include attachments: registration, insurance proof, title, certification from disposal facility, deal sheet showing MSRP, salvage value, all rebates, etc.
NHTSA will review all submissions, reject those that are incomplete or incorrect, and send payment on those that meet all requirements
CARS Credit plus…CARS Credit plus…
CARS Act requires the dealer to use the CARS credit in addition to rebates or discounts offered or advertised by the dealer and/or OEM. The dealer may not use this credit to offset these rebates or discounts.
Dealer can combine the CARS credit with other State and Federal incentives, e.g., the Hybrid vehicle credit.
Dealer must disclose best estimate of “scrap value” to customer
Dealer may retain $50 of that for administrative costs
CARS Act requires the dealer to use the CARS credit in addition to rebates or discounts offered or advertised by the dealer and/or OEM. The dealer may not use this credit to offset these rebates or discounts.
Dealer can combine the CARS credit with other State and Federal incentives, e.g., the Hybrid vehicle credit.
Dealer must disclose best estimate of “scrap value” to customer
Dealer may retain $50 of that for administrative costs
Value of CreditsValue of Credits
New Passenger Car
$3,500 credit if its combined fuel economy at least 4 mpg above that of trade-in
$4,500 if difference at least 10 mpg
New Category 1 Truck
$3,500 if at least 2 mpg higher
$4,500 if at least 5 mpg higher
New Passenger Car
$3,500 credit if its combined fuel economy at least 4 mpg above that of trade-in
$4,500 if difference at least 10 mpg
New Category 1 Truck
$3,500 if at least 2 mpg higher
$4,500 if at least 5 mpg higher
Value of CreditsValue of Credits
New Category 2 Truck $3,500 if trade-in is Category 2 and new
truck at least 1 mpg higher OR trade-in is Category 3 of MY 2001 or earlier
$4,500 if trade-in is Category 2 and new truck at least 2 mpg higher
New Category 3 Truck $3,500 if trade-in is Category 3 of MY 2001
or earlier and similar size or larger than new truck
New Category 2 Truck $3,500 if trade-in is Category 2 and new
truck at least 1 mpg higher OR trade-in is Category 3 of MY 2001 or earlier
$4,500 if trade-in is Category 2 and new truck at least 2 mpg higher
New Category 3 Truck $3,500 if trade-in is Category 3 of MY 2001
or earlier and similar size or larger than new truck
Trade-in VehicleTrade-in Vehicle
CARS Act established four criteria
Must be in drivable condition
Must have been continuously insured, registered to the same owner for previous 12 months
Must be less than 25 years old at time of trade-in
Combined “new” fuel economy rating less than 18 mpg (Category 3 not rated)
Category 3 work trucks no newer than MY 2001
CARS Act established four criteria
Must be in drivable condition
Must have been continuously insured, registered to the same owner for previous 12 months
Must be less than 25 years old at time of trade-in
Combined “new” fuel economy rating less than 18 mpg (Category 3 not rated)
Category 3 work trucks no newer than MY 2001
Category 3 TrucksCategory 3 Trucks
May be traded in only for a Category 2 or Category 3 truck
Not more than 7.5 percent of program funds available for purchase or lease of new vehicles in this category
Once limit is reached, no more payments will be made for these transactions
May be traded in only for a Category 2 or Category 3 truck
Not more than 7.5 percent of program funds available for purchase or lease of new vehicles in this category
Once limit is reached, no more payments will be made for these transactions
Vehicle to Lease or PurchaseVehicle to Lease or Purchase
CARS Act applies to new vehicles
MSRP must not exceed $45,000
Must achieve certain fuel economy ratings
Passenger vehicles at least 22 mpg
Category 1 trucks at least 18 mpg
Category 2 trucks at least 15 mpg
Category 3 trucks no mpg requirement
Other special requirements apply
CARS Act applies to new vehicles
MSRP must not exceed $45,000
Must achieve certain fuel economy ratings
Passenger vehicles at least 22 mpg
Category 1 trucks at least 18 mpg
Category 2 trucks at least 15 mpg
Category 3 trucks no mpg requirement
Other special requirements apply
Vehicle CategoriesVehicle Categories
Passenger automobiles Passenger cars
Category 1 truck Non-passenger automobiles
SUVs, small and medium pickups, small and medium cargo vans
Passenger automobiles Passenger cars
Category 1 truck Non-passenger automobiles
SUVs, small and medium pickups, small and medium cargo vans
Vehicle CategoriesVehicle Categories
Category 2 truck
Large van or large pickup truck
More than 115-inch wheelbase for pickups, more than 124-inch wheelbase for vans
Category 3 truck
Work truck rated between 8,500 lbs and 10,000 lbs gross vehicle weight rating (those with cargo beds 72 inches or more in length) and very large cargo vans
Category 2 truck
Large van or large pickup truck
More than 115-inch wheelbase for pickups, more than 124-inch wheelbase for vans
Category 3 truck
Work truck rated between 8,500 lbs and 10,000 lbs gross vehicle weight rating (those with cargo beds 72 inches or more in length) and very large cargo vans
Vehicle DisposalVehicle Disposal
Dealer must certify that it will not sell, lease, exchange or dispose of trade-in for use as an auto in United States or any country
Dealer must transfer trade-in to entity that will ensure that the vehicle is crushed or shredded
Disposal entity can sell parts except engine block and drive train (unless drive train sold as separate parts)
NHTSA will publish list of disposal entities
NHTSA may include requirements for how engine can be rendered inoperative by dealer to reduce possibility of continued use
Dealer must certify that it will not sell, lease, exchange or dispose of trade-in for use as an auto in United States or any country
Dealer must transfer trade-in to entity that will ensure that the vehicle is crushed or shredded
Disposal entity can sell parts except engine block and drive train (unless drive train sold as separate parts)
NHTSA will publish list of disposal entities
NHTSA may include requirements for how engine can be rendered inoperative by dealer to reduce possibility of continued use
Preventing FraudPreventing Fraud
Statute provides for civil penalties up to $15,000 for violations; clerical errors are not violations
NHTSA will be very aggressive in preventing fraud related to this program and punishing violators if it occurs
Dealers, purchasers, and disposal entities will certify to the accuracy of all assertions they make as part of program
Note: Willfully false statements may be punishable by criminal fines and imprisonment
Dealers and disposal entities should anticipate audits by NHTSA and requests for records
Statute provides for civil penalties up to $15,000 for violations; clerical errors are not violations
NHTSA will be very aggressive in preventing fraud related to this program and punishing violators if it occurs
Dealers, purchasers, and disposal entities will certify to the accuracy of all assertions they make as part of program
Note: Willfully false statements may be punishable by criminal fines and imprisonment
Dealers and disposal entities should anticipate audits by NHTSA and requests for records
Final PointsFinal Points NHTSA is doing everything it can to make this
a successful program
The short time NHTSA has to implement the program creates significant challenges
We understand how anxious everyone is to begin transactions—we hope you all understand the challenges
We look forward to continued cooperation with all involved in the program
For further information see www.cars.gov
NHTSA is doing everything it can to make this a successful program
The short time NHTSA has to implement the program creates significant challenges
We understand how anxious everyone is to begin transactions—we hope you all understand the challenges
We look forward to continued cooperation with all involved in the program
For further information see www.cars.gov