The National Highway Traffic Safety Administration (NHTSA), within the Department of Transportation (DOT), has been given the responsibility to carry out the Consumer Assistance to Recycle and Save Act of 2009 (the CARS Act) (Pub. L. No. 111-32), which the President signed into law on June 24, 2009. The Act establishes a temporary program under which an owner of a motor vehicle meeting statutorily specified criteria may trade in the vehicle and receive a monetary credit from the dealer toward the purchase or lease of a new motor vehicle meeting statutorily specified criteria (the CARS Program or Program).
The CARS Program covers qualifying transactions that occur between July 1, 2009 and November 1, 2009. If all of the conditions of eligibility are met and the dealer provides NHTSA with sufficient documentation relating to the transaction (much of which is obtained by the dealer directly from the consumer), NHTSA will make an electronic payment to the dealer equal to the amount of the credit extended by the dealer to the consumer, not exceeding the statutorily authorized amount. The dealer must agree to transfer the trade-in vehicle to a salvage auction or 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 may be sold prior to disposal.