Consumer Car Buying Advice Blog

Bad credit car loan buyers along with everybody else may be wondering where all the dealers are for the new Cash for Clunkers program

A big splash then silence

At Auto Credit Express, we, like everyone else, are waiting as patiently as possible for car dealers to start advertising the Car Allowance Rebate System, or CARS – the official name of the federal Cash for Clunkers legislation - that was signed into law on June 24th amid much ballyhoo and chest-thumping by all involved. Since that time, other than the ramp-up of the government web site at www.cars.gov (and innumerable other sites), very little has come forth. It turns out, however, that there is a reason for this.

Implementation

As part of the CARS act, there was a requirement that the NHTSA issue final regulations for the act within 30 days. Within this time period the agency has to:

•    Set up a means to register dealers
•    Set up a procedure to reimburse dealers
•    Specify how dealers are to use the credit
•    Establish requirements for the transaction
•    Establish procedures for vehicle disposal
•    Establish enforcement and penalty guidelines

In addition, the agency also has to list, on the official web site, vehicle eligibility requirements, participation requirements, a vehicle eligibility list and, last but not least, how to determine if a dealer is eligible.

Needless to say, the NHTSA has been, shall we say, rather busy tying up these loose ends – so busy, in fact, that it has made it abundantly clear to dealers that many of the rules have yet to be finalized by making this statement:

“While the CARS Act makes transactions on and after July 1 potentially eligible for credits under the CARS program, interested dealers and consumers may want to wait until all of the detailed issues that must be addressed in the implementing regulations are resolved and the final rule is issued. Issuance will occur around July 23. At that point, NHTSA will have in place detailed provisions about establishing eligibility and a system to ensure the prompt payment of money for credits used under the CARS program. If dealer choose to structure a transaction before the final rule is issued, they will bear the risks associated with later demonstrating that the transaction meets all of the specifications of the final rule. The dealers should also give the credit to the consumer at the time of such transaction. The dealer would be reimbursed by NHTSA later if the dealer registers and submits documentation sufficient to demonstrate that the transaction was an eligible one, that the traded-in vehicle was properly disposed of, and that all requirements in the final rule were met.”

In other words, dealers can take part in the program beginning July 1st, but they do it at their own risk. If any part of the transaction violates the rules that will be issued on July 23rd (a reasonable assumption, given the time constraints the NHTSA is under), they, alone, will be responsible for the monetary loss of the funds associated with a voucher.

6 steps

Once all policies and procedures are in place on July 23rd, the process should be fairly simple. Here are the 6 steps outlined by the CARS site:

1.    Visit Cars.gov for current information about the program.
2.    Determine if you qualify, then shop for a new car.
3.    Bring the title, registration and insurance papers showing continuous registration and insurance coverage for the past full year.
4.    When you buy or lease a new vehicle, the dealer handles the submission of all required information to NHTSA
5.    NHTSA ensures that your purchase meets the requirements
6.    About 10 days later, NHTSA will issue a financial credit to the dealer – assuming all program requirements have been met.

Bad credit car loans

Bad credit car loan shoppers should also follow the additional steps from this previous article.

The Bottom Line

At Auto Credit Express, our business is to help people with bad, blemished, bruised and tarnished credit buy a car and reestablish their credit at the same time. Our national network of affiliate dealers, who are familiar with the CARS act, specialize in bad credit car loans. If you have any additional questions, our web site will help you determine how much car you can afford and, unlike other sites, our toll free number is listed on every page in case you have any additional questions.

When you decide to buy a car, our credit application can be filled out in the comfort and security of your own home. For more information, visit www.autocreditexpress.com.

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