Car Allowance Rebate System (CARS)
The following criteria was put in place to qualify for the Car Allowance Rebate System program: Vehicle must be less than 25 years old on the trade-in date. Only the purchase or five-year minimum lease of new vehicles qualify. Generally, trade-in vehicles must get a weighted combined average rating of 18 or fewer miles per gallon (some very large pickup trucks and cargo vans have different requirements). Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in. Trade-in vehicles must be in drivable condition. The program requires the scrapping of the eligible trade-in vehicle and that the dealer disclose to the customer an estimate of the scrap value of the trade-in. The Car Allowance Rebate System was a U.S. government program that allowed people to trade in used vehicles that did not meet government-specified fuel economy standards. In response to the U.S. Department of Transportation estimate that the $1 billion appropriated for the system was almost exhausted by July 30, 2009, due to very high demand, Congress approved an additional $2 billion for the program with the explicit support of the Obama Administration. Blinder argued that a cash-for-clunkers program would have a tripartite purpose of helping the environment, stimulating the economy, and reducing economic inequality.
Definition of Car Allowance Rebate System (CARS)
The Car Allowance Rebate System was a U.S. government program that allowed people to trade in used vehicles that did not meet government-specified fuel economy standards. Under President Barack Obama’s administration, people trading in old cars could qualify for a discount of either $3,500 or $4,500 off the purchase or five-plus-year lease of a newer, more fuel efficient vehicle. The program began on July 1, 2009, and ended shortly thereafter because it became so popular that funds quickly ran out.
Understanding Car Allowance Rebate System (CARS)
Commonly known as "Cash for Clunkers," the Car Allowance Rebate System’s stated purposes were to reduce air pollution, to stimulate consumer spending and to prop up struggling U.S. auto manufacturers (though the program did allow the purchase of foreign vehicles). Ultimately, consumers traded in as estimated 680,000 vehicles. Car dealers were required to crush or shred the trade-in vehicles.
The Car Allowance Rebate System was initially a $1 billion program. Due to its popularity, Congress quickly allocated an additional $2 billion, bringing the total to $3 billion.
(CARS) Legislative History
Economist Alan Blinder helped popularize the idea of a scrappage program, and the moniker "cash for clunkers", with his July 2008 op-ed piece in the New York Times. Blinder argued that a cash-for-clunkers program would have a tripartite purpose of helping the environment, stimulating the economy, and reducing economic inequality.
The House approved the creation of a cash-for-clunkers program with the 298 to 119 passage of the CARS Act. In the Senate, the cash-for-clunkers legislation was inserted into a larger war supplemental funding bill. In response to the U.S. Department of Transportation estimate that the $1 billion appropriated for the system was almost exhausted by July 30, 2009, due to very high demand, Congress approved an additional $2 billion for the program with the explicit support of the Obama Administration.
CARS Eligibility Requirements
The following criteria was put in place to qualify for the Car Allowance Rebate System program:
Related terms:
Cash for Clunkers
Cash for Clunkers was a former federal program that gave owners a way to dispose of old vehicles in exchange for more fuel-efficient cars. read more
Clunker
A clunker is a popular reference to the old vehicle traded in under the U.S. government's "cash-for-clunkers" program, rolled out in 2009. read more
Consumer Spending
Consumer spending is the amount of money spent on consumption goods in an economy. read more
Gas Guzzler Tax
The gas guzzler tax is a U.S. excise tax imposed on the manufacturers or importers of passenger cars that do not meet fuel economy standards. read more
National Housing Act
The National Housing Act, passed in 1934 to strengthen the residential real estate market, created the Federal Housing Administration (FHA). read more
Rebate
A rebate in a short-sale transaction is the portion of interest or dividends paid by the short seller to the owner of the shares being sold short. read more
Trade Act of 1974
The Trade Act of 1974 passed to expand U.S. participation in international trade and reduce trade disputes through the reduction of barriers to trade. read more