It seems a few customers are having difficulty understanding exactly how the rules of the CARS program play out when purchasing a new car. Here is the verbage from the CARS FAQ’s
In addition to this credit, will I get the full value of my trade-in vehicle?
No. The law requires your trade-in vehicle to be destroyed. Therefore, the value you negotiate with the dealer for your trade-in vehicle is not likely to exceed its scrap value. The law requires the dealer to disclose to you an estimate of the scrap value of your trade-in vehicle.
But the deal still works out well because the total discount is much better than if they just got a higher trade-in price.