CARS: What you need to know
Q: Do I need to get a voucher or sign up for this program?
A: 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.
Q: May I receive or use more than one credit?
A: No, the CARS Act specifies that not more than one credit may be issued to a single person, not more than one credit may be issued for joint registered owners of a single eligible trade-in vehicle, and that only one credit under this program may be applied toward the purchase or lease of any single new vehicle.
Q: What is the value of the credit?
A: It depends upon the difference between the combined fuel economy of the vehicle that is traded in and that of the new vehicle that is purchased or leased. If the new vehicle has a combined fuel economy that is at least 4, but less than 10, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new vehicle has a combined fuel economy value that is at least 10 miles per gallon higher than the traded-in vehicle, the credit is $4,500.
Q: What is the value of the credit for the purchase or lease of a new van, pickup truck or SUV?
A: It depends on the difference between the combined fuel economy of the vehicle that is traded in and that of the new vehicle that is purchased or leased. If the new vehicle is a Category 1 truck that has a combined fuel economy value that is at least 2, but less than 5, miles per gallon higher than the traded-in vehicle, the credit is $3,500. If the new Category 1 truck has a combined fuel economy value that is at least 5 miles per gallon higher than the traded-in vehicle, the credit is $4,500. If both the new vehicle and the traded-in vehicle are Category 2 trucks and the combined fuel economy value of the new vehicle is at least 1, but less than 2, miles per gallon higher than the combined fuel economy value of the traded in vehicle, the credit is $3,500. If both the new vehicle and the traded-in vehicle are Category 2 trucks and the combined fuel economy of the new vehicle is at least 2 miles per gallon higher than that of the traded-in vehicle, the credit is $4,500. A $3,500 credit applies to the purchase or lease of a Category 2 truck if the trade-in vehicle is a Category 3 (work) truck that was manufactured not later than model year 2001, but not earlier than 25 years before the date of the trade in.
Q: Is the credit subject to being taxed as income to the consumers?
A: The credit is not income for the consumer.
Q: Can I use this credit in combination with manufacturer's rebates and discounts?
A: The CARS Act requires the dealer to use the credit under the CARS program in addition to any rebates or discounts advertised by the dealer or offered by the new vehicle's manufacturer. The dealer may not use the credit to offset these rebates and discounts.
Q: What will I need to bring to the dealer to participate in the program?
A: You should bring documentation establishing the identity of the person who currently owns the vehicle, preferably the title of the vehicle, and documentary proof that the vehicle "has been continuously insured consistent with the applicable state law and registered to the same owner for a period of not less than one year immediately prior to the trade-in."
Source: Cars.gov