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It's rare for the Detroit 3 automakers, the UAW and various politicians to agree on anything meaningful, but that's exactly what appears to be happening after Rep. Betty Sutton of Ohio (D) introduced a bill in Congress called Consumer Assistance to Recycle and Save bill (CARS Act) that revives the so-called "Cash for Clunkers" plan. This bill would offer consumers up to $5,000 to trade in a vehicle that's at least 8 years old in exchange for a new one built in the United States that gets at least 27 mpg if it's a car or 24 mpg if it's a truck or SUV. The total payout would be based on the new vehicle's mileage rating.

General Motors, Ford and Chrysler are all supporting the bill, as is the United Auto Workers union. Vehicles built in either Canada or Mexico would need to get at least 30 mpg and would be eligible for up to $4,000. The CARS plan would apply to all automakers equally, but only for vehicles assembled in North America. Sorry, Toyota Prius and Honda Insight. Mass transit vouchers would also be included in the legislation as an option for trading in an older vehicle. Click past the break for the official press release.

[Source: U.S. Representative Betty Sutton | Photo: dave_7]

PRESS RELEASE:

Representative Sutton Introduces Innovative Legislation to Help Consumers and Auto Sales - While Improving the Environment and Preserving Jobs

WASHINGTON - In a move to take older, gas-guzzling vehicles off the road and spur new car sales, Representative Betty Sutton (OH) introduced legislation today that will provide consumers a $3,000 to $5,000 incentive to buy more fuel-efficient cars, trucks or use mass transit.

Rep. Sutton's Consumer Assistance to Recycle and Save (CARS) Act gives consumer purchase incentives for turning in vehicles that are 8 years or older to buy more fuel-efficient vehicles or to obtain a transit voucher. In the legislation, new car purchases that qualify for this incentive must achieve a minimum of 27 miles per gallon on highways, while new trucks must achieve a minimum of 24 mpg for highway driving. The bill provides graduated incentives based on greater fuel efficiency.

"The CARS Act will achieve many goals: consumers will finally get a break to purchase more fuel-efficient vehicles; we will all benefit from a reduction of CO2; and the auto industry will get a jumpstart to spur sales," Rep Sutton said. "This legislation will help consumers, stimulate our economy, improve our environment, reduce our dependence on foreign oil, and help our domestic auto and related industries, upon which millions of American families depend upon for employment."

"U.S. auto sales have fallen over 40 percent in the last year - a steeper decline than in the early 1980s. This trend, which affects all automakers, must be quickly reversed to preserve American jobs. The CARS Act provides consumers a needed incentive to buy a vehicle, while working to reduce greenhouse gas emissions and fuel consumption," Sutton added.

Recently, a similar concept has worked in Germany. After implementation of its consumer incentive program, sales of new vehicles in Germany increased 21 percent in February 2009, versus the same month a year ago.

The legislation also offers transit vouchers in exchange for older, high emission vehicles. "By providing a transit voucher option, this bill will also encourage the use of mass transit, which will similarly benefit our economy and environment."


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  • 24 Comments
      • 3 Months Ago
      I see the scammers coming out of the wood works on this one.

      Maybe I should spend a few thousand and stock up on a few old clunkers and then offer them for sale to new car buyers who can take advantage of the government subsidy. There are so many potential scams going through my head right now with this program.

      (And lets be very clear, this is clearly a subsidy to car makers and nothing more).
        • 3 Months Ago
        You have to do your research. This article doesn't go very deep into the legislation. I know there are going to be people out there trying to turn this into a scam. The government has thought of this one already. To ensure that the vehicles being scrapped or recycled are actually being driven before the swap, trade-ins must
        be insured to the same owner for at least a year.
      • 3 Months Ago
      Too many strings attached! If you want to cut emissions, just pay to scrap the old cars. Off the road is off the road, and a new car is a worse replacement than no car at all. Furthermore, why no rebate for buying a used but more efficient car?

      If you want to spur new car sales, do something about the difficult credit situation. This really is a terrible time to buy a new car of any kind.

      Finally, if you're trying to do something about the vastly overextended consumer credit that got us into this mess, stop trying to encourage people to buy new cars they don't need!

      Here's my proposal: $1000 if it rolls, $3000 if it runs, show proof of ownership.
      Optional: throw in a free bicycle for every member of the family. Can't get more green than that!
      • 3 Months Ago
      For those interested in an independent analysis of the Cash for Clunkers bill, the following op-ed is a good read http://www.forbes.com/2009/05/21/clunkers-bill-congress-opinions-contributors-guzzle.html. The author, Rafi Musher of Stax Inc. (www.stax.com), offers an alternate approach that would help us reach our goal of energy independence more effectively, at 1/3 the cost.
      • 3 Months Ago
      So, in an effort to improve fuel efficiency, they want to pay me thousands of dollars to trade my 40-mpg Geo Metro in for a 24-mpg SUV. Is that right?
        • 3 Months Ago
        No, if you read correctly, it says for cars that get inefficient gas mileage. Why would they have you trade in your high mileage car for a lower mileage one? its for people like me who have a 17mpg highway vehicle and would like to try and save our planet. Thanks for your negativity.
        • 3 Months Ago
        It's not about fuel effeciency, it is about generating sales and stimulating the economy.
      • 3 Months Ago
      It's not terribly difficult to do this. I think it should be increased to 7500 and limited to certain levels of income and require that the vehicles be sold with a service plan covering maintenance for 10 years/150k and the service plan should be limited in price so dealers aren't charging 5k for 150k worth of service. When people go to trade these vehicles back in after 10 years. We should send them to developing countries where they can be sold for 90 percent of the 5k trade in. Since all vehicles were well maintained they would be easily driven another 100k if maintenance is kept up. Thus, actual cost of the program in the long-term will be very small and increase worldwide adoption of the car as a normal mode of transportation.

      Simple fact, well maintained vehicles are the ones that run the cleanest and longest on the road. Low income families have the least amount of money for this process. If we standardize this process for them, we can make it easy for them to have a good standard of living while promoting growth in countries around the world.
      • 3 Months Ago
      I think the MPG rating of the trade in should be the factor, not the age of the car. Get maybe $500 per every MPG you increase over the trade in. Trading in a 20 mpg pickup for a 30 mpg car gets you $5000. And if you have a 10 mpg clunker, a Prius would almost be free. But trade in a 30 mpg Toyota for a 24 mpg Detroit product and you owe an extra $3000. That'd do it.
      • 3 Months Ago
      If we view this as a plan to stimulate the economy, then it is bound to fail. Why? It isn't sustainable. It is a simple-minded fix to a very complex problem. We will end up in the same place we are today ten years from now, with everyone scratching their heads. Heck, next time will probably be even worse than what we are experiencing today.

      As long as the economy is in turmoil, people need to get to the bottom, the REAL bottom, of what caused this mess and fix that. Simply applying patches and bandaids is not the solution... just delaying the inevitable.
      • 3 Months Ago
      Hmmm...my old '98 Durango may be seeing the junkyard soon. I may be tempted to get another Indiana made Subie.

      I'm too lazy to see what the valid dates for this deal would be, and if the 2010 Legacy/ Outback would be out in time. ;)
      • 3 Months Ago
      It's actually not environmentally friendly to change an old gas guzzler for a new car, because gas consumption is not the only environmental aspect that should be considered. Making a new car in the factory from the scratch with all the metal parts that it requires takes major toll on efforts to curb climate change. If only climate change is considered, it's better to drive the old car until it gets too expensive to fix. That's what I learned in my high school back in 2005.

      If government wants to start considering climate change, I'd suggest making public transport connections better.
      • 3 Months Ago
      It needs one stipulation: the vehicle you trade in must be less fuel efficient than the one you buy.
        • 3 Months Ago
        In reading the act, I thought it said that...as well as one vehicle per person/family.
      • 3 Months Ago
      I wish John I and Genwaylaid were running for congress, or at least in a position to have their suggestions heard!! I think the spirit of the bill is a good one, but a few too many holes that probably wont be fixed if it IS passed, making everyone think it was a bad idea to begin with.

      • 3 Months Ago
      I'm curious as to what provisions will be made to dispose of or recycle all the cars that will pile up. Or will they just all be neatly shipped off to other countries for junking like waste electronics and chemical disposal? Any talk of disposal fees for the fluids, tires, hazardous metals?
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