New Federal Car Rebate Program Information

Serving Los Angeles, Riverside, Ventura, San Bernardino Counties & Nearby Areas of California

On July 1, 2009, a federal program signed into law by President Obama provides a rebate for people who trade in older gas-guzzlers for new, more fuel-efficient automobiles. The Car Allowance Rebate System (CARS) program is applicable to car purchases that occurred on or after July 1, 2009. People with vehicles that qualify for the program may be able to receive rebates between $3,500 and $4,500 on the purchase of a new qualifying vehicle. To qualify for the program, the following conditions must apply:







  • The vehicle traded in must be less than 25 years old by the trade-in date and in drivable condition.
  • The rebate applies only to the purchase or lease of new vehicles with a manufacturer’s suggested retail price of $45,000 or less. The new vehicle can be from a foreign or domestic car manufacturer. Pre-owned vehicles are not eligible for the program.
  • Generally, the vehicle being traded in must get mileage of 18 miles per gallon or less (different requirements apply to some cargo vans and very large pick-up trucks).
  • Trade-in vehicles must be registered and insured continuously for the full year preceding the date of the trade-in.
  • Participating auto dealers will apply the rebate at the time of purchase so no vouchers are required.
  • The CARS program runs through Nov 1, 2009 or when the program funds are exhausted, whichever comes first.
  • Vehicles traded in must be destroyed. Therefore, the value you negotiate with the dealer for your trade-in is not likely to exceed its scrap value. The new law requires the dealer to disclose an estimate of the scrap value of your trade-in vehicle.

The CARS program is implemented and overseen by the National Highway Traffic Safety Administration (NHTSA), which must publish the program’s rules and regulations by July 24, 2009. The new law requires auto dealers to register to participate in the program, and the agency will update the list of participating dealers on the website. Anyone wishing to take advantage of the program is encouraged to contact dealers in their area to see which have registered. States will license the respective dealers to sell new automobiles.

The program does not apply to vehicles purchased before July 1, 2009. Only qualifying vehicles bought on or after that day may have the rebate applied to their purchase price. Qualifying vehicles are passenger cars, category 1 trucks, category 2 trucks or category 3 trucks. Each category has slightly different qualifications.

The NHTSA plans to vigorously investigate any claims of fraud in connection with the rebate program. If you believe that you have been the victim of car fraud in California, the vehicle fraud lawyers at the Law Offices of Howard D. Silver may be able to help. Our experienced California car fraud attorneys can investigate your case and hold those responsible for perpetrating the fraud accountable for their actions. To speak with our California auto fraud lawyers who also have knowledge of the California lemon law, call 866.49.LEMON today.