BREAKING: House, Senate reach terms on 'Cash for Clunkers' program - but only with $1B in funding
by Chris Paukert on Jun 12th 2009 at 12:40PM 
According to The Detroit News, the House and Senate came to terms late last night on a $1 billion 'cash for clunkers' initiative. Part of a larger $106 billion wartime spending bill, the program is not yet law, as the finalized bill must be passed by Congress (it is expected to be voted on next week) and signed into law by President Obama.
Under the terms of the compromise, vouchers worth up to $4,500 would be distributed to those who turn in old vehicles. The program's $1B backing figures to be well short of the $4B it is estimated to cost, meaning that the funding is expected to run out after September 30, the end of the fiscal year. As the theory goes, getting the program approved was the first big step – the DetNews says that key supporters believe that additional funding could be agreed upon subsequently.
As you may recall, the House approved the measure earlier this week, but there were reports of some significant troubles in the Senate where funding and mileage requirements were concerned. In the end, the same mileage figures were reportedly agreed upon, meaning vehicles that return 18 mpg or less in combined city/highway are eligible to turn in their vehicle for a cash voucher. If the new car replacement achieves at least 4 mpg better, a $3,500 voucher would be awarded, and if the new car achieved at least 10 mpg more, the credit would be $4,500. Trucks figure to be a bit different, however, with replacement vehicles needing to net at least 18 mpg, with figures at least 2 mpg better than the soon-to-be-scrapped turn-in. In order to receive the full $4,500 voucher, however, truck buyers' new vehicle would have to improve their fuel economy figures by at least 5 mpg.
[Source: The Detroit News | Image: Theo Heimann/Getty]]
Reader Comments (Page 1 of 1)
paulwesterberg 1:04PM (6/12/2009)
$3,500 for a measly 4mpg improvement?! pathetic.
It should be $3,500 for 10mpg and $4,500 for 15mpg.
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wave54 2:32PM (6/12/2009)
Agreed! The government shouldn't be involved with this in the first place. Being that it is, the fuel economy improvements should have been MUCH higher to justify the cost.
BTW, I desperately need new shoes and pants. Can I get a voucher for turning in my worn-out duds, please?
Throwback 2:20PM (6/12/2009)
The point is to stimulate car sales, not save the planet no matter what the pols say.
oollyoumn 1:13PM (6/12/2009)
I just traded for a 27mpg improvement, but I would not be eligible for this program because my previous car had a 23mpg combined rating. Once again we set our sights too low.
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Brent 1:09PM (7/03/2009)
Same here, I just moved from 21 to 51, 30mpg improvement. Will I even get a tax credit at all, nope. So far on my 2010 prius I'm getting just under 60mpg. I'm wondering on the fine print, could I still squeeze in buying a 500 dollar
polo 2:23PM (6/12/2009)
The mpg requirement is so low and so few cars will qualify this is really a "Cash for SUVs" program. Since thats the case I'm glad they under-funded it.
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anon 2:45PM (6/12/2009)
I am eligible and know this can take a big chunk out of a new car price. Especially since my budget is for the econobox market (Honda Fit, VW Rabbit, etc.)
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Doug 2:55PM (6/12/2009)
This idea should be scrapped. For the money it will cost, it will be of marginal help. We're in enough debt as it is.
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Throwback 3:10PM (6/12/2009)
I agree, but most Americans seem to believe the government has the answers to every problem. All it takes is borrowing more money.
dave 3:33PM (6/12/2009)
Isn't it just like the Democrats to reward bad behavior? So if you were ignorant enough to buy a gas guzzler they will give you money to buy another one!
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lne937s 3:42PM (6/12/2009)
Seeing that it is coming out of the "wartime spending" bill gives me an idea of where something like this could really help. Let everybody in the military that is about to be shipped overseas turn in their car for a $10,000 voucher towards a new car making decent fuel economy when they get back. Then they won't have to try to figure out what to do with their cars while they are away. Many buy new cars when the get back anyway, so they are pretty likely to use the program. Take the cars and crush all that make less than ~25 mpg. Sell the more efficient used cars that pass emissions and are in good working order to military servicemembers and dependants for scrap value.
Then this would benefit the auto industry, the environment, dependence on foreign oil, returning soldiers, military families...
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Ken 4:19PM (6/12/2009)
These should be higher gas mileage and/or hybrid or diesel requirement and require trade in car be more than 10 years old (so we get real clunkers that have higher emissions). Plus, offer a larger incentive and fund it better.
A special benefit for those returning from being stationed overseas would be great since this is in a war funding bill.
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mike 4:39PM (6/12/2009)
$4,500 PLUS trade-in or just $4,500?
If it's the latter then that's one way to keep it constrained to older cars, the ones that have a trade-in value less than 4500.
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GoodCheer 4:51PM (6/12/2009)
Why would a dealership buy your trade-in if it's going to be crushed?
--> I assume $4500 instead of a trade-in.
Greg McKenney 5:57PM (6/12/2009)
How soon after (when and if) it passes will it get implemented? How exactly does this work...Do I apply to the government for a "voucher" and then take it to the dealer (How long would that take?) or will the dealers be handing out these "vouchers"? Also which EPA mpg figure are we talking about here, the average or the highway? My wife's Ford Taurus gets about 23mpg most of the time. Why can't I get a voucher to upgrade it to a new car that gets 35mpg?
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Bob 12:24PM (6/16/2009)
Can you turn in a clunker truck and get voucher to purchase a car? Difficult to tell from the language, seems if may be car for car or truck for truck. Also read the vehicle you use for the voucher needs to been insured during the last 12 month period... this is keep people from abusing the program.
kawzuy 8:06PM (6/15/2009)
wonderful idea ;) now more Americans can scrap their old vehicles and go out and buy new cars they do not need with money they do not have.
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Bob Westfall 11:59PM (6/18/2009)
This is a marketing bonanza for used car dealers. The value of junk just went up.
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