FROM OUR ARCHIVES: Step 1 in guzzlers plan -- Dealers must register

All you need to know about new-vehicle vouchers

The plan requires trade-ins to be scrapped.

This story was originally published on June 19, 2009

Dealers must register to participate in the “cash for guzzlers” program passed Thursday by the Senate and expected to receive President Barack Obama’s signature.

The legislation says the government must establish a procedure for registering dealers within 30 days of Obama’s signing.

But the program can apply to new vehicles purchased or leased between July 1 and Nov. 1, 2009, so dealers and consumers can start considering participation now.

The legislation, designed to help lift U.S. light-vehicle sales from 27-year lows, provides vouchers of $3,500 to $4,500 to consumers who trade in their rides for new vehicles that are more fuel-efficient. Congress allocated $1 billion to fund the program.

Here are the program details, as outlined in the bill approved this week by the House and Senate.

Eligible new vehicles:

• Cars must have combined highway and city fuel economy of at least 22 mpg.

• Small light trucks must have combined fuel economy of at least 18 mpg.

• Large light trucks must have combined fuel economy of at least 15 mpg.

• Must have suggested retail price of $45,000 or less

Trade-ins:

• Must be in “drivable condition”

• Must have been continuously insured and registered to their owners for at least one year

• Must be less than 25 years old

• Must have combined fuel economy of 18 mpg or less

• Must be turned in for scrappage

For a $4,500 voucher:

• New cars must beat the trade-ins’ combined highway and city fuel economy by at least 10 mpg.

• New small light trucks must improve on the trade-ins’ combined fuel economy by at least 5 mpg.

• New large light trucks must beat the same-class trade-ins’ combined fuel economy by at least 2 mpg.

For a $3,500 voucher:

• New cars must improve on the trade-ins’ combined fuel economy by at least 4 mpg.

• New small light trucks must beat the trade-ins’ combined fuel economy by at least 2 mpg.

• New large light trucks must improve on same-class trade-ins’ combined fuel economy by at least 1 mpg, or they must replace a larger-class light truck from model year 2001 or earlier.

• The largest light trucks qualify if their trade-ins are the same size or larger and from model year 2001 or earlier.

Within 30 days of enactment, the government will publish a Web site that includes guidelines for determining eligible trade-ins, details on participation and a list of new vehicles that meet program requirements.

Other rules:

• One voucher per person, and one voucher per trade-in for vehicles with multiple registered owners.

• Qualifying leases must be at least 5 years long.

• Vouchers may be combined with other federal, state or local incentives or vouchers.

• Vouchers may not offset rebates or discounts offered by dealers or automakers.

• Vouchers do not count as income for tax or government assistance purposes.

• Dealers may not charge any additional fees to customers who use the vouchers.

• Dealers must tell customers the true scrappage value of trade-ins.

• Those to whom dealers give the trade-ins for scrappage may sell any of the vehicles’ parts, other than the engine blocks and combined drive trains.

• Dealers may keep $50 of anything they receive for scrapping the vehicle to help with program administration.

All dealers in the program must accept the vouchers and turn in participating trade-in vehicles, including their engine blocks, for scrapping. The government will establish procedures for turning in the vehicles, the legislation says. The federal government will then send the vouchers to dealers in electronic payments within 10 days of receiving information about the sale.

Of the $1 billion available for the program, the National Highway Traffic Safety Administration can spend up to $50 million on administration costs. No more than 7.5 percent of the funds for the program can go toward purchases of the largest class of light trucks.

0

Shares

ATTENTION COMMENTERS: Over the last few months, Automotive News has monitored a significant increase in the number of personal attacks and abusive comments on our site. We encourage our readers to voice their opinions and argue their points. We expect disagreement. We do not expect our readers to turn on each other. We will be aggressively deleting all comments that personally attack another poster, or an article author, even if the comment is otherwise a well-argued observation. If we see repeated behavior, we will ban the commenter. Please help us maintain a civil level of discourse.

Newsletters