The Cash for Clunkers bill has now been handed over to the National Highway Safety Administration (NHTSA) and the official website for the program is http://cars.gov.  The website is an acronym for Car Allowance Rebate System (CARS) and the program should be implemented in late July accord to the NHTSA website.

Consumers and car dealers who will be participating in the CARS program are warned not to mess with Uncle Sam.  According to a new page added to the official CARS website (http://www.cars.gov/fraud-faq.html) the NHTSA is advising consumers and car dealers to play by the rules.

The Lure

With up to a $4,500 cash rebate on the line, some people may be thinking of ways to defraud the government by falsifying documents or not crushing cars that are meant to be taken off the road.  Our advice is to stay away from anyone suggesting that they can beat the system.  Penalties can be as high as $15,000 per offense.

Don’t Take Our Word For It

The NHTSA is serious about taking clunkers off the road that are traded-in as part of the Car Allowance Rebate System (CARS).  Here is an excerpt from their Fraud Awareness page:

“At the time of the transaction at the dealer, the consumer who is trading in the “trade-in vehicle” will need to provide evidence of ownership of the vehicle and proof that the vehicle has been continuously registered and insured to the same person throughout the last 12 months.

To prevent repeated use of the program by the same person, we anticipate that the consumer will need to provide evidence of identity, such as a driver’s license, and permit that information to become part of the documentation of the transaction.

The dealer will have every reason to avoid entering into a transaction for which the dealer cannot be reimbursed under this program. The dealer will be expected to verify that the vehicle being traded in and the vehicle being purchased or leased are both eligible under the program. This will entail, with regard to the trade-in, making sure that the registration and insurance information is accurate and that the vehicle is in drivable condition. For both vehicles, the dealer will need to verify their combined fuel economy.

With regard to the trade-in, NHTSA is considering various measures to ensure that the vehicle is never used again as an automobile in this or any other country. We intend to enforce the Act’s requirements strictly and vigorously and to conduct audits to detect any possible violations. See the question below on penalties and enforcement policies.”

Regarding Penalties

Here is an excerpt of the penalties for making a fraudulent transaction under the CARS program.

“Are there penalties for violations related to the CARS program?

Yes. The money Congress has provided for this program is intended only for eligible recipients, and the requirement to destroy the trade-in vehicle is an important part of the program. To protect consumers, dealers, and others, NHTSA intends to enforce the Act and the implementing regulations strictly.

The CARS Act has provisions specifically aimed at preventing fraud. A person who violates the Act or the implementing regulations could be subject to a fine of up to $15,000 per transaction. While NHTSA may provide discretionary relief for innocent clerical errors, NHTSA intends to prevent fraud in the first place and penalize any fraud that occurs.

Willful misstatements or false reporting made to the government in connection with the program may also make a person liable for criminal penalties under applicable laws.”

For the latest official information on the CARS program visit: http://cars.gov

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