| What is the Car Allowance Rebate System?
The CAR Allowance Rebate System (CARS) is a $1 billion
government program that helps consumers buy or lease a more
environmentally-friendly vehicle from a participating dealer
when they trade in a less fuel-efficient car or truck. The
program is designed to energize the economy; boost auto
sales and put safer, cleaner and more fuel-efficient
vehicles on the nation's roadways.
Consumers will be able to take advantage of this program and
receive a $3,500 or $4,500 discount from the car dealer when
they trade in their old vehicle and purchase or lease a new
one. Consumers you do not need to register anywhere or at
anytime for this program. However, to find out if your
trade-in qualifies and what value it is worth click here.
May I receive or use more than one
credit under the CARS program?
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.
What is the amount of the credit?
The amount of the credit 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.
What is the value of the credit for the purchase or lease
of a new van, pickup truck or SUV?
The value of the credit given for the purchase or lease of a
category 1 or 2 truck also generally 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.
Is the credit subject to being taxed as
income to the consumers that participate in the program?
The CARS Act expressly provides that the
credit is not income for the consumer.
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