U.S. Cash for Clunkers deal nearing compromise
It's looking increasingly likely that the United States will soon have its own Cash for Clinkers program. Two bills are currently competing for Congressional votes, and while they would both offer sizable rewards for turning in older vehicles, they vary in what new cars and trucks would qualify for the program.
One bill, sponsored by Rep. Betty Sutton (D-Ohio), would give the largest voucher – up to $5,000 – to purchasers of new vehicles made in the United States. Slightly smaller amounts would be granted for other vehicles made in the rest of North America and no cash would be granted for the purchase of foreign-made cars. All cars would need to manage at least 27 mpg to qualify, trucks would need to hit at least 24 mpg.
The other bill, sponsored by Rep. Steve Israel (D-N.Y.), would offer up to $4,500 for the purchase of a new vehicle assuming the trade-in got 18 mpg or less and the new vehicle was at least 25 percent better than average for its class. No distinction would be made based on the vehicle's country of origin.
According to Israel, the two sides are 90 percent of the way to an acceptable compromise. Even after an agreement is reached on a final bill, policymakers will need to figure out how to come up with the (up to) $4 billion that the program would cost and what exactly to do with the so-called clunkers.
[Source: Detroit News | Photo: dave_7, CC2]
Reader Comments (Page 1 of 1)
Mike Z 4:01PM (4/24/2009)
So If I'm thinking of buying a new car soon, can I just buy a $500 POS, store it, and get a great return on my investment if the bill passes?
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meme 4:03PM (4/24/2009)
The final bill isn't in yet, but the two competing bills are H.R.1550 H.R.520 -- go check them out at thomas.loc.gov.
Prinn 10:57PM (4/24/2009)
you probably could, but remember you would have to buy a new car to unload your investment...and you know what happens to the value of your car once its driven off the lot.
It would work if you actually wanted a new car though
the edge 12:56PM (7/23/2009)
You must prove you have had it both registered and insured for the past 12 months in your name at the address to which you will be titling the new one.
mem 4:03PM (4/24/2009)
Ticks me off that neither of the bills will allow you to trade in a clunker for the most efficient upcoming vehicle to hit American streets, the Aptera 2e.
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Mike Z 4:02PM (4/24/2009)
PS, lets cut the bull and call it a subsidy already!
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GoodCheer 4:59PM (4/24/2009)
Not that I'm disagreeing with you, but would you rather
a) Just give huge low-interest "loans" to the automakers based on how ugly their financials are.
b) Set up a system like this where they can compete for our business ...with consumer-side help.
c) Just let them fail.
Richard 5:35PM (4/24/2009)
d) Provide real universal health care the way that all other first world countries do (at statistically less than we're currently paying for healthcare in this country).
That would allow the automakers (and all other businesses) to stop paying massive premiums for their workers. Of course, there'd be a (smaller) tax bump, but generally they'd come out ahead. Also, it would remove the retirement health care off the liability sheets for the Big 3, which would in and of itself turn things around for them.
There'd be an added bonus that striking out on your own to start a small business would no longer be a "you bet your life on it" proposition, too, which couldn't help but encourage people to innovate themselves, but that's just gravy.
Fraser Young 11:27AM (4/25/2009)
Greetings from the Green Vehicle Exchange Program..
We have solutions concieved for eliminating all of the problems related to vehicle
scrappage.
They will be implemented soon in the US and our advice has been offered to the UK govt
and industry associations.
We will prevent the increase in prices for the older cars from these plans, helping the
lesser fortunate as opposed to hindering them with limited supply.
We will avoid the decline in newer used car values that has resulted in Germany(30pc> in
value)from demand decline.
We will make wider eligibility that will offer incentives to those with 5-10 year old
cars that will be far more likely to participate financially in the first place.
We also have a system designed to help repair shops and part suppliers with $2-300 in tune up repairs on millions of cars all self funded.
We will remove many more of the real oldest higher polluters and not cause"negligible
carbon reduction" beneits as a result of our better systems.
Fraser J.M. Young
Creator - Executive Director
Brian 12:48PM (4/25/2009)
"policymakers will need to figure out how to come up with the (up to) $4 billion that the program would cost..."
To put this in perspective. The US paid almost $5 billion in corn subsidies in 2006.
http://farm.ewg.org/farm/progdetail.php?fips=00000&progcode=corn
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jharlan 4:43PM (4/25/2009)
This is a subsidy of course, but designed to drive consumer behavior to support our auto industry and drive cleaner, more fuel efficient cars. It's cheaper than just blowing billions to auto makers with failed business plans.
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Sam W 4:00PM (5/05/2009)
So the bill, sponsored by Rep. Steve Israel, it looks like my 2001 Toyota w/ 125k miles on it would not qualify because even though it is old and I would like to replace it with a Prius or TDI for better milage it gets too good of gas milage...
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