U.S. Government Car Incentive Rebate Updates

2009 New Vehicle Purchases – Important 3500 & 4500 Auto Voucher Info

Aug 12, 2009

U.S. government Cash for Clunkers car rebates are not subject to contingency agreements (cars.gov). Dealers can't pause $3,500 & $4,500 auto incentives pending approval.

According to an update on the cars.gov homepage, the U.S. federal government has learned that some car dealerships have asked consumers to sign contingency agreements related to the Cash for Clunkers rebate program.

This article discusses how the Cash for Clunkers process should work and what the government is telling dealers and consumers about contingency agreements.

3500 & 4500 Government Car Incentives

The way the program works is dealers must consummate a deal with the consumer prior to applying for and receiving reimbursement from the government. The consumer trades in a qualifying old vehicle for an eligible new vehicle and receives a $3,500 or $4,500 credit toward purchase. Only after the deal has been made and the trade-in vehicle has been set aside for destruction does the dealer get to apply for reimbursement for the government car rebate amount through the Cash for Clunkers program.

U.S. Federal Government Car Rebates – Contingency Agreements, Possession

On cars.gov, the United States government made it very clear that consumers cannot be required to sign contingency agreements for any Cash for Clunkers purchases. In bold upper case letters, cars.gov read, “Consumers should not sign contingency agreements to pay back the dealer should the CARS credit be rejected."

This means that once the consumer drives off the lot with a new vehicle purchased under the Cash for Clunkers program, the dealership cannot ask the consumer to bring the new vehicle back if the government voucher credit is ultimately denied.

Furthermore, the National Highway Traffic Safety Administration (NHTSA) noted that some dealers have asked consumers to hang on to their trade-in vehicles until the voucher reimbursement is approved. According to the NHTSA, this type of practice is also not acceptable. Cars.gov read, “If the dealer has the new car in stock, the dealer must allow you to take possession of the new car before the dealer may submit the credit application to the government.”

2009 New Vehicle Purchases – Participating Dealership Responsibility

Why is the government not allowing car dealerships to enforce contingency agreements or make consumers hold on to clunkers in case the voucher application is denied? It’s because the government is making the dealerships accountable for collecting correct information. It’s not the public’s responsibility. The responsibility for accurate reporting lies within the hands of participating dealers that offer the Cash for Clunkers program to consumers.

The government urges consumers to report unscrupulous participating car dealerships directly to the NHTSA at 1-866-CAR-7861 (the CARS hotline).

Auto Vouchers for Americans – Related Cash for Clunkers Articles

Consumers interested in learning more about the Cash for Clunkers, or CARS, program may wish to read the following articles:

The copyright of the article U.S. Government Car Incentive Rebate Updates in Consumer Rights is owned by Lena Gott. Permission to republish U.S. Government Car Incentive Rebate Updates in print or online must be granted by the author in writing.