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CARS - Car Allowance Rebate System

Frequently asked questions (FAQs) dealer information

"Cash for Clunkers"

The Car Allowance Rebate System (CARS) is officially closed and new sales are no longer available under the program. Information is still available on their website at http://www.cars.gov or by calling 1-866-CAR-7891.

Qualifying for a rebate

To qualify for a rebate, trade-in vehicles must:

• Be in drivable condition
• Be registered and insured continuously for the full year preceding the trade-in
• Not be more then 25 years old prior to the trade in date
• Have a combined fuel efficiency rating of 18 mpg or less (some very large pick-up trucks and cargo vans have different requirements)

Trade-ins are required to be disposed of by crushing or shredding.

Proof of ownership

Most Wisconsin vehicle dealers will have access to the information needed for a customer to show the date the vehicle was titled as proof of ownership and the last year's registration. For documentation that cannot be provided by the dealer, the customer must:

• Show the title with an issue date of at least July 1, 2008 and their current registration, or
• Obtain proof from a commercial entity that sells motor vehicle records and the current vehicle registration, or
• Request the WisDOT provide verification ($10 fee required). Such requests must be submitted by mail using form MV2896 (Obtaining Vehicle or Driver Record Information) and include the reference "Cash for Clunkers." Note that such verification is not available through any DMV customer service center.

Frequently asked questions (FAQs)

Dealer information

NOTE: In the interest of time, customers SHOULD NOT visit a DMV Customer Service Center.

Most DEALERS CAN verify the owner had registration for the previous year:

• DMV Record showing title issue date of at least one-year prior and their current registration. A Dealer can obtain these items from the DMV record through the CVR, triVIN, or e-MV11 programs. This approved method will allow the transaction to be completed without having to send the customer to the DMV Service Center.
• Proof from a commercial entity such as CarFax or Autocheck, as well as a current Certificate of Registration.
• If neither of the above, a certified record fee of $10 and, a DPPA MV2896 must be submitted. Due to a large volume of requests it is first come first served.

Handling the purchase contract

Show the trade-in on the purchase contract (identify it in the top section as you normally would). This will help complete the paper trail for the vehicle.

The Wisconsin Department of Revenue (DOR) has indicated that they are treating the CARS amount as a reduction in the sales price of the vehicle and as such have instructed that dealers disclose that amount on line 1 c. (Discount) of the purchase contract pricing table. Dealers must show the CARS amount by doing the following.

Price of the vehicle
Dealer retail price………._____________
Services fee……………..._____________
Discount…CARS………..______________

Then, under the “Other Conditions of Sale” section of the Purchase Contract you enter the phrase, “Purchase price reduced by the Cars Allowance Rebate Program (CARS)”.

In the event that you chose to give your customer an additional discount off of the MSRP you would include it as one lump sum and disclose it as such:

Price of vehicle
Dealer retail price………._____________
Services fee……………..._____________
Discount…CARS………..____$4,000____
Then, also under “Other Conditions of Sale,”“Purchase price reduced by Cars Allowance Rebate System (CARS) in the amount of $3,500 and additional dealer discount of $500.”

Wisconsin sales tax does not apply:

For purposes of Wisconsin's sales and use taxes, the amount of the voucher issued by NHTSA is not subject to Wisconsin sales or use taxes. The amount of the voucher that is paid directly to the car dealer from NHTSA, a federal government agency, is not subject to Wisconsin sales or use tax since this part of the sale is considered a sale to the federal government.

Advertising the price

Dealers are able to include the price of the CARS amount (up to $4,500) in the advertised price of a vehicle.

$20,000 MSRP
$18,000 Sale Price
$4,500 CARS Program (if qualified)
$13,500 new price

Proof of insurance:

Because New Hampshire and Wisconsin do not have an insurance requirement under state law, trade-in vehicles registered in these two states are exempt from the one-year insurance requirement.

When do dealers have to disable the engine of the trade-in vehicle?

The agency amended its rule implementing the CARS program. Dealers may now choose to disable the engine of the trade-in vehicle after they receive payment from the government for the credit (not more than seven calendar days after payment). However, until the vehicle’s engine is disabled, the dealer must store the vehicle at a location under the control of the dealership.

What to do with the title of the "clunker" trade in:

Mark the title as junked and send it with the vehicle. It is not necessary to transfer ownership to the dealership before sending it to the salvage yard/auction.

Registering for the program:

Dealers can now register their dealership for the program by going to http://www.cars.gov/. You should have received a letter from the U.S. Department of Transportation, National Highway Traffic Safety Administration (NHTSA) indicating that you are eligible for the program and providing you with your authorization code, and vehicle makes. NHTSA received contact information from your franchise manufacturer. If you did not receive a letter or your letter has incorrect franchises listed you can contact NHTSA by calling 1-866-227-7891 or call your manufacturer zone manager.

Further questions about the CARS program contact:
Megan Shotliff, Dealer and Agent Section (608) 261-2552

If you have questions regarding titling and registering a new vehicle:

• E-mail: vehiclequestions@dot.wi.gov
• Call: (608) 266-1466, between 7:30 a.m. and 4:30 p.m., Monday through Friday

All external hyperlinks are provided for your information and for the benefit of the general public. The Wisconsin Department of Transportation does not testify to, sponsor or endorse the accuracy of the information provided on externally linked pages.

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Questions about the content of this page:
Bureau of Vehicle Services, bur-veh-services.dmv@dot.state.wi.us
Last modified: August 26, 2009