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CARS – “Cash for Clunkers” Initiative

 

On July 24,2009 the U.S. Government announced the details of the Car Allowance Rebate System (CARS) or “Cash for Clunkers” initiative. This program was launched to help consumers buy or lease a more environmentally friendly vehicle when they trade in a less fuel efficient car or truck.

Below is a list of BMW vehicles that are eligible for this program. These vehicles satisfy the minimum fuel economy standards AND have a base price of less than $45,000. The value of the credit is either $3,500 or $4,500 and is based 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.

CARS Group: Passenger Automobiles	MSRP	City	Highway	Combined
128i Coupe (Automatic only)	$29,400.00	18	28	22
328i Coupe (Automatic only)	$36,500.00	18	28	22
328i Sedan (Automatic only)	$33,600.00	18	28	22
335d Sedan	$43,900.00	23	36	27
CARS Group: Category 1 Truck	MSRP	City	Highway	Combined
X3 xdrive30i manual	$39,700.00	16	23	19
X3 xdrive30i automatic	$39,700.00	17	24	20

The program is effective July 24, 2009 and runs through November 1, 2009 or until the funds are exhausted. The attached CARS fact sheet details important facts that you need to know about the program.

This fact sheet is being provided for informational purposes only. In addition to the attached fact sheet, you have other sources available. You can log on to www.CARS.gov or call the hotline at (866)-CAR-7891 for additional information. Please carefully review the information available on the program website to ensure program compliance is met.

 The CARS credit can be combined will all current sales support offers in place at time of the sale, including the BMW Eco Credit for the 335d.

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Important Things to Know

• All dealers wishing to participate must be registered with the US Government.
• Rebates are limited to transactions between July 1, 2009, and November 1, 2009, OR when the funds are exhausted — even if that occurs before November 1.
• Each transaction submitted will require accurate supporting documentation to ensure timely reimbursement. Errors and omissions will result in rejection and a resubmission of the transaction with corrected documentation. Dealers are subject to substantial penalties for fraudulent claims.
• Certain states do not require MSOs (Michigan and California) or proof of insurance (Wisconsin). However, these are required program documents and must be provided for reimbursement.
• NHTSA will provide the dealer with guidance on how to process the transaction, checklist for accurately completing the transaction and examples of mistakes to avoid.

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What is the value of the credit for the purchase or lease of a new passenger car?

The value of the credit for the purchase or lease of a new passenger car 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.

What is the value of the credit for the purchase or lease of a new SUV?

The value of the credit given for the purchase or lease of a category 1 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.

Where can I find the combined city/highway fuel economy ratings for trade-in vehicles?

Please visit www.fueleconomy.gov.

How will I know if cars or trucks are eligible trade-in vehicles?

There are several requirements. In general, the trade-in vehicle must:

• have been manufactured less than 25 years before the date of the trade-in
• have a “new” combined city/highway fuel economy of 18 miles per gallon or less
• be in drivable condition
• be continuously insured and registered to the same owner for the full year preceding the trade in
• The trade-in vehicle must have been manufactured not earlier than 25 years before the date of trade in and, in the case of a category 3 truck, must also have been manufactured not later than model year 2001

What must the new vehicle’s minimum combined fuel economy level be to qualify?

For passenger automobiles, the new vehicle must have a combined fuel economy value of at least 22 miles per gallon. For category 1 trucks, the new vehicle must have a combined fuel economy value of at least 18 miles per gallon.

Is there a cap on the price of the vehicle a dealer can sell or lease under the program?

Yes. The new vehicle base MSRP — the price on the Monroney label, before any features, options, taxes, or destination charges are added to the price, cannot exceed $45,000.

Does the program apply to vehicle leases?

Under the program, consumers 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 to BMW NA Company Vehicles?

The program excludes cars that were previously registered or titled.

Does the program apply if a dealer wants to sell a used car?

No. The program does not apply to the purchase of used vehicles.

In addition to the credit, do consumers expect full trade-in value for their vehicle?

No. The law requires the trade-in vehicle to be destroyed. The law requires a dealer to disclose to the consumer an estimate of the scrap value of their trade-in vehicle.

Can a dealer resell the traded-in vehicle?

The CARS Act requires that the trade-in vehicle be crushed or shredded so that it will not be resold for use in the United States or elsewhere as an automobile. The entity crushing or shredding the vehicles in this manner will be allowed to sell some parts of the vehicle prior to crushing or shredding it, but these parts cannot include the engine or the drive train.

Do consumers have to pay State or local sales tax on the amount of the CARS program credit?

The question of whether a consumer must pay State or local sales tax on the amount of the CARS program credit would depend on the sales tax law of each State or locality. Dealers should review the law of their respective States or consult a tax advisor to answer this question.

Will consumers need to get a voucher or sign up for this program?

No. Consumers do not need a voucher and are not required to sign up or enroll in this program. If you are a participating new car dealer, you will apply a credit, reducing the price of the new vehicle at the time of purchase or lease, provided the vehicle you sell or lease and the vehicle traded in meet the program requirements. You will then obtain reimbursement from the government.

Can this credit be combined with other government incentives?

Yes. Consumers can combine this with other State and Federal incentives, such as the hybrid vehicle credit. For information on this credit, refer consumers to http://www.fueleconomy.gov/Feg/tax_hybrid.shtml.

May dealers use the credit in combination with manufacturer rebates or discounts?

The CARS Act requires dealers 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. You may not use the credit to offset these rebates and discounts.

Are consumers allowed to 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.

Can dealers charge a fee for selling or leasing a vehicle under the CARS program?

While dealers can charge normal types of fees, the CARS Act specifically prohibits you from charging a fee for selling or leasing a vehicle under the program.

What is the value of the credit for the purchase or lease of a new SUV?

The value of the credit given for the purchase or lease of a category 1 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.