Clear Title Required
The agency has concluded that in order to be entitled to reimbursement under the program, a dealer must obtain clear title to the trade-in vehicle. Without clear title, the dealer is not in a position to make the statutorily required legal certification as to disposal of the trade-in vehicle that serves as a prerequisite to reimbursement. Similarly, disposal facilities would generally be unable to crush or shred the trade-in vehicle, as required under the Act.
No Motorcycles
Some vehicles—notably motorcycles—simply are not eligible under the CARS Act, either as trade-in vehicles or for purchase or lease, even though consumers have noted that transactions involving those vehicles might reduce fuel use and improve the environment.
Category 3 Truck Clarification
A category 3 truck that is traded in for another category 3 truck is entitled to a $3,500 credit if the new vehicle is “smaller or similar in size.” In view of the fact that Congress has not spoken directly to the precise meaning of this term, consistent with available information, NHTSA has incorporated this statutory requirement as satisfied if the gross vehicle weight rating of the new category 3 truck is no greater than that of the trade-in category 3 truck.
Eligible Dealers
A dealer must be a United States dealer and a trade-in vehicle must be insured and registered in the United States. However, nothing in the Act excludes U.S. territories from the reach of the program. Consequently, in section 599.102, the agency has defined “State” to include the 50 United States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands.
Excluded Vehicles
The law excludes vehicles that NHTSA has determined are
- not manufactured primarily for transporting persons and
- vehicles that are capable of off-highway operation.
Vehicles not manufactured primarily for transporting persons include pickup trucks and certain vehicles that permit expanded use of the vehicle for cargo-carrying purposes, including vehicles which are designed to transport more than 10 persons; provide temporary living quarters, transport property on an open bed, provide greater cargo-carrying than passenger-carrying volume, or permit expanded use of the automobile for cargo-carrying purposes or other nonpassenger-carrying purposes.
Vehicles that are capable of off highway operation include three groups of vehicles. The first includes vehicles that have 4-wheel drive and have at least four out of five specified physical characteristics relating to ground clearance.
The second includes vehicles that are rated at more than 6,000 pounds gross vehicle weight and have at least four out of five specified physical characteristics relating to ground clearance, but do not have 4-wheel drive.
The third includes 2-wheel drive SUVs (regardless of GVWR) which came in a 4-wheel drive version that met four of five specified physical characteristics related to ground clearance. Beginning with the 2011 model year, NHTSA will reclassify this third group of vehicles as passenger cars. Although neither specified nor prohibited in the CARS Act, the agency has concluded that it is most appropriate to define passenger cars using the NHTSA regulations and policy that are applicable to 2010 and earlier model year vehicles.
Shortest Wheelbase Counts
For category 1 and 2 trucks with a variety of wheelbases, the size classification is determined by considering only the shortest wheelbase produced. If a secondary manufacturer modifies and introduces into commerce a vehicle with only a limited portion of the wheelbases offered by the original equipment manufacturer (OEM), the size classification for the secondary manufacturer will be determined by (and consistent with) the size classification determined for the OEM. For example, if General Motors produces 2008 model year Chevrolet Colorado pickup trucks with wheelbases of 111, 119 and 126 inches, Colorado pickup trucks would be classified as category 1 trucks for CARS purposes (because the shortest wheelbase Colorado pickup truck was less than or equal to 115 inches).
Some Parts Salvageable
The dealer must agree to transfer the trade-in vehicle to a disposal facility that will crush or shred it so that it will never be returned to the road, although parts of the vehicle, other than the engine block and drive train (unless the drive train is sold in separate parts), may be sold prior to disposal. In the end the residual vehicle, including the engine block, must be crushed or shredded.
Telling Language
The impact of the Act will most likely not be large enough to increase production by manufacturers, and dealers on average will only be selling an additional 12 vehicles (250,000 estimated number of vehicles sold during the program divided by 19,700 dealers as of early 2009) during the course of the program.
