The US appears set to follow the UK’s lead with its own version of the vehicle scrappage scheme known as the Car Allowance Rebate System – or CARS for short. The programme, which has been dubbed ‘cash for clunkers’, was signed into law on June 24 with issuance expected to occur on July 23.
So how will the US scheme work? Here is a brief guide:
- - The CARS Act makes transactions on and after July 1 potentially eligible for credits though dealers and consumers have been advised to wait until all of the regulations have been resolved after July 23.
- - The scheme will run until November 1, 2009 – or until all funds have been exhausted.
- - Vehicles must be less than 25 years old on the trade-in date.
- - Dealers apply a credit at purchase – no voucher is needed.
- - Only purchases or lease of new vehicles qualify.
- - Trade-in vehicles must get 18 or less miles per gallon (some large pick-up trucks and cargo vans have different requirements).
- - Trade-in vehicles must be registered and insured for a full year preceding the trade-in.
- - The vehicle that is traded in is required to be destroyed so the value negotiated for the trade-in is not likely to exceed the scrap value. By law, the dealer must disclose an estimate of the scrap value of the vehicle.
