There has been some confusion about certain dealer requirements to receive the government’s CARS rebate discount. Car shoppers go to the dealer, and in some cases, are asked to do all kinds of things to receive the discount, trade-in their clunker and take their new vehicle home.
On the cash for clunkers official Web site, cars.gov, there is a list of common things shoppers are experiencing when they participate in the CARS program. There are things the dealers CANNOT make you do to take part in the rebate program. Read on to make sure you know the rules before you head to the dealer.
Q: A dealer has demanded that I sign an agreement that requires me to pay the dealer $4,500 [or $3,500] if the dealer’s credit application is rejected. Am I required to agree to this?
A: No. To participate in the CARS program, you do not have to sign an agreement to pay back the dealer the CARS credit amount if the deal is rejected.
Q: The dealer says that I should take my trade-in car home after I sign the purchase agreement for a new car under the CARS Program, and that I can pick up my new car after the dealer is paid by the government. Can I do this?
A: No. The dealer must take possession of your trade-in vehicle in order to submit a credit for reimbursement under the CARS Program. You may not keep possession of your old car.
Q: A dealer has demanded that I sign an agreement that requires me to pay the dealer if the credit application is rejected because I submit incorrect information regarding my name, residence address, driver’s license number, or the title to my trade-in car. Am I required to agree to this?
A: No. However, be aware that to participate in the CARS program you must certify under penalty of law that all information you provide is true. If your CARS program credit is denied because of a false statement made by you, the dealer may take action to recover the money or vehicle regardless of whether you sign such an agreement.
Q: A dealer has demanded that I leave a signed check or credit card authorization in the CARS credit amount ($4,500 or $3,500) that he will return to me if the credit application is approved, but keep if the credit application is rejected. Is the dealer allowed to do this?
A: No. The dealer must reduce the price of the new vehicle by the credit amount. If a dealer has a check or credit card authorization given by you at the time of the sale, the dealer has not actually reduced the price as required by the CARS program. Please contact NHTSA immediately and take your trade-in to another dealer if a dealer requires this.
Q: A dealer said he will wait to extend me the CARS program credit amount until after the dealer gets the money from the government. Is the dealer allowed to do this?
A: No. The dealer must certify in its application for reimbursement that the dealer has already reduced the price of the new vehicle in the amount of the CARS program credit it requests.
Q: A dealer has included in the purchase agreement a requirement that I return the new car or pay the dealer the amount of the CARS program credit if the credit application is rejected. Do I have to sign this in order to participate in the CARS Program?
A: No. You are not required to sign an agreement like this to participate in the CARS Program. However, you may agree to such a term, but your choice to agree is between you and the dealer.
Q: The dealer has told me that I cannot take my new car home and that I have to wait until the CARS credit application is approved before I can take possession of my new car. Can the dealer do this?
A: No. If the dealer has the new car, the dealer must allow you to take possession of the car before the dealer may submit the CARS credit application to the government. Please report any dealer to NHTSA that does not allow you take possession of a new car purchased under the CARS Program.