Chrissie Thompson
Automotive News
July 24, 2009 - 8:41 am ET
UPDATED: 7/23/09 1:09 p.m. ET


Dealers participating in the "cash for guzzlers" program must visit www.cars.gov to find a list of facilities that may qualify for scrapping vehicles and then make sure the company can crush or shred trade-ins, according to preliminary rules on the Web site.


The government posted the rules today for the program, designed to lift U.S. light-vehicle sales from 27-year lows. "Cash for guzzlers" gives consumers vouchers of up to $4,500 for trading in some gas-guzzling vehicles for new ones with better fuel economy.

The list of companies that may qualify for disposing of trade-ins is under the "Disposal and Salvage" link on the Web site, under the bullet point labeled "ELVS List by State." Not all of those disposal firms can crush or shred cars, the federal rules say, so dealers must ask whether they can do so. The facilities can use a mobile crusher, the rules say.

Download the rules in PDF format here
Edmunds.com ''Cash For Clunkers Calculator" The list may change as disposal companies join or leave the End of Life Vehicle Solutions group used as a source for the Web site, the rules say. So dealers must check the list on the site when they take each trade-in to be scrapped.

In addition, before trade-ins are crushed, dealerships must disable their engines. The procedure for doing so is on page 127 of the rules.

When they receive the trade-ins, disposal facilities must certify they will follow the program's rules for safely disposing mercury switches and other pollutants in the vehicles. The paperwork for doing so is at the "Disposal and Salvage" link at www.cars.gov and on page 130 of the rules.

Instead of sending the vehicle directly to a disposal facility, dealerships may also transfer trade-ins to a salvage auction. The salvage auction must fill out similar paperwork certifying that it will follow the regulations for scrapping the vehicles by taking trade-ins directly to a qualifying scrappage company. Those forms are also available at www.cars.gov and on page 133 of the rules.

Dealers must send completed disposal facility or salvage auction paperwork to disposal@cars.gov within seven days of getting it signed, the rules say.

Companies that crush the trade-ins cannot transfer them to another disposal facility, including a shredder, according to the rules.

List of dealers

Consumers wanting to get the government vouchers can find a list of registered dealers at www.cars.gov, the rules say. Participating dealers must be on a list of franchised dealers, which the government obtained from automakers and will update weekly to reflect new and discontinued franchise agreements.

Those dealers have received letters instructing them on how to register for the program, the rules say, adding that dealers must sign up separately for each brand they sell. The letters included information for registering electronically, and dealers will receive e-mail confirmation after doing so. Their names should appear on the www.cars.gov Web site within two to four days, the government estimates in the rules.

Along with the Web site, the government has set up a "cash-for-guzzlers" hotline, reachable at (866) 227-7891.

Getting reimbursed

To get reimbursed for the consumer's voucher, dealers must first submit applications electronically, using the username and password they receive via e-mail after registering for the program. Page 128 of the rules shows a sample application page that dealers can reference to prepare the necessary information about trade-ins, new vehicles and purchasers.

The government will use the information about the buyers to confirm they have not already received vouchers for a different purchase, including one that involved a vehicle jointly registered to more than one person.

Each dealer must attach electronic copies of the purchase contract or lease agreement, the manufacturer's certificate of origin, certification paperwork from the salvage auction or disposal company and a "summary of sale/lease and certifications form" signed by the dealer and the buyer (page 122 in the rules). The government also "requests" that the dealership attach a customer survey (page 129 in the rules), the rules say.

If an application shows the dealer has met the cash-for-guzzlers requirements, the government will reimburse the dealership for the voucher amount by electronic transfer to an account the dealer lists upon registering for the program.

If the application is incomplete or shows that the dealer or vehicles did not meet the requirements, the government will electronically notify the dealer of the reason for rejection. Dealerships may correct and resubmit rejected applications at no penalty, the rules say.

Government administration

The National Highway Traffic Safety Administration is administering the program. The agency said it plans to hire 30 employees and more than 200 contractual workers to handle the program for the next six months.

It estimates 250,000 vehicles will be sold under the program, which is about 12 vehicles for each of the 19,700 dealers that the rules say were in business in early 2009.

"Manufacturers' and dealers' employment levels are unlikely to be impacted," the rules say.

NHTSA says dealers, salvage auctions and scrappage facilities may incur costs from the program. But after telling buyers the scrap value of their trade-in, dealerships may keep $50 of any amount paid to them for scrapping the vehicle to cover their administrative costs.

The rules say they apply to any qualifying purchases or leases made after July 1, but they will not take official effect until they are published in the Federal Register, which has not yet happened.

The cash-for-guzzlers legislation, also known as "cash for clunkers," provides vouchers of $3,500 to $4,500 to customers.

These can include individuals, along with "legal entities, such as corporations and partnerships," the rules say. Congress allocated $1 billion to fund the program, which expires Nov. 1, unless the funding runs out before then.

New cars eligible for the federal incentive must have combined highway and city fuel economy of at least 22 mpg, and smaller light trucks must have combined fuel economy of at least 18 mpg. New vehicles must have a suggested retail price of $45,000 or less.

Trade-ins eligible for cash-for-guzzlers must be drivable, less than 25 years old and have combined fuel economy of 18 mpg or less. They must have been continuously insured and registered to their owners for at least one year.

While I completely disagree with the direction we are heading and what the administration has done so far, I also would be an idiot not to take advantage of an offer like this thrown in my lap. I just traded in an 89 F150 that would barely run over about 10% throttle after a small engine fire and leaked transmission fluid so bad that I had to add 5 quarts of transmission fluid to it just to get it to move after sitting for a year on a new Silverado. I will post up some pics and intro of myself when I get the chance.

Galen

I guess the point I am trying to make here: Let's see how many dealers get into this complicated mess (i.e. do it to themselves). This, although possibly well-intentioned, will turn out to be another govt. boon-doggle.

Local dealership to me is running ads like crazy about this program. They'll sell cars from this I'm sure.

Dealers are running ads and taking in cars like mad in trade. Everybody is getting the discount that they would have normally gotten and leaves believing they got that money from the government. Dealers then apply for the government money, pocket it, and auction off the cars. It's a total scam just like anything else the "government" comes up with. A few wise shoppers (like Galen) with the right vehicle are getting the full deal but most are so stupid that they think the dealer discount was the government money... and they are just giving away their trades.

Dealers are whores and people are stupid. It's a lot like taking candy from a baby.

+1 I'm seeing that happen where I'm at too.

What I find difficult to believe is any fast talking car dealer taking the time to follow this process. Can imagin it now, let's see if we can get a clunker approval from a bureaucrat on a Saturday afternoon. Most of the dealers I have met want their customers to sign & drive away before they loose the emotion of the sale and they change their mind. No way...just wait until those recycled clunkers starts showing up on ebay.

The Gov'ment said they are scared of running out of money for the other rebate incentive for new cars that they are halting the Clunkers program.
I guess they thought 4 or 5 people would take advantage of the deal. What the hell goes through their heads up there? It ain't much...



They probably screwed the car dealers even more. With the program ending they may not even recoup the extra advertising money they've spent so far, at least around here since every other commmercial is a "clunkers" one and the papers are full too.

Big Gov'ment is outstanding.

Ain't it though???

OK... let's see how long it takes to get the dealers their money.... the check's in the mail.

see here

Uh oh, looks like they found another billion laying around to keep the program going. Senate votes next week I guess. If you are in the market, better jump on it while the jumping is good.