Remember, these credits are in addition to any rebates and incentives the manufacturer is offering, so this can amount to a five-digit savings or more off the new vehicle when you combine the credit with the manufacturer's rebates.
"Don't think you 'did well' if the only discount you received was the CARS credit," says Brauer. "Almost all automakers are offering some other type of rebate currently and you want to make sure you get all of the discounts offered on your vehicle."
Step 5: Decide on a dealer.
At the time of publication, about 16,000 of the 20,000 franchised new car dealers were registered to participate in the CARS program, but the National Highway Traffic Safety Administration, the government agency that is administering the program, says that consumers should use its searchable database to locate a dealer to ensure the dealer they choose is participating.
Consumers do not need to register for the program. To participate, they simply reach an agreement to buy or lease a new qualifying vehicle with any participating dealer and then tell the dealer they want to trade-in their old vehicle under the CARS program. Any third party who reaches out to a consumer to try to "match" them with a dealer for the program may be committing fraud, and consumers should be cautious, the NHTSA and attorneys general in Ohio and Illinois warn.
With the majority of dealers participating in the program, you have plenty of choices as to where to take your business. Some dealers may be more willing to negotiate the price of the new vehicle than others, so choose carefully.
Brauer advises, "To get the best deal, do research online to determine the new vehicle's invoice price as well as all the credits, rebates and incentives the new vehicle qualifies for. Then negotiate the purchase price with the dealer before mentioning you have a clunker that qualifies for the CARS credit."
Step 6: Complete the transaction paperwork and drive home.
Consumers should make sure that the transaction paperwork clearly outlines the terms of the sale, the applicable credits (including the $3,500 or $4,500 CARS credit and any manufacturer's rebates) and the applicable fees to ensure they are being charged appropriately. The CARS credit is deducted from the purchase price of the vehicle at the time of the sale or lease commencement. The dealer gets reimbursed via the program after it sends the old vehicle to be crushed.
The CARS program will end on Nov. 1, 2009 or when the $1 billion allocation runs out, whichever comes first. Updates on the program as well as more details can be found at cars.gov or by calling (866) CAR-7891.