• Jun 12th 2009 at 10:26AM
  • 50
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]]

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    • 1 Second Ago
      • 6 Years Ago
      The other points missed about this legislation-
      1. The car must be a 1984 or newer (mine's an '82 Fleetwood- doesn't qualify)
      2. The $4500 CANNOT be applied as a down payment- you still have to pony up the 10% (providing you have good credit).
      3. The car must be NEW- dealer demos do not qualify.

      This is a piece of s*#t program that needs to be scrapped. Let the law of supply and demand settle the mess that was created. After all, it took two years for the last "new" Pontiac Aztec to finally sell.
        • 6 Years Ago
        Doesn't the voucher count towards trade-in? What's the difference between a down payment and a trade-in if they both reduce the cost of purchase? And where did you get the idea that "you still have to pony up the 10%" for down payment?
      • 6 Years Ago
      nooo! Current truck = 16 mpg combined, camaro SS manual = 19 mpg.

      Needs to be 4mpg better to get the $3500 voucher. I suppose it woulda been too good to be true.
        • 6 Years Ago
        So bite the bullet and buy the 6 cyl. Camaro. 300+ hp is nothing to sneeze at. And, if the price of gas skyrockets over the years you own the car, you might actually be happier with the 6.
      • 6 Years Ago
      This is more stupidity in motion. You know, I happen to like my 1988 chevy pickup just fine. Not getting rid of it. I only drive it when I need to get loads of rocks or manure. But I guess it's value just went from about $1000 to $4500.

      What about the person who wants to buy an old utility truck? That market will dry up. Sorry. More government micromanaging your life.
        • 6 Years Ago
        The government's not gonna come take away your old pickup, sir. You can put the pitchfork down.
        • 6 Years Ago
        Can you dump some of that manure in front of your local Federal Building?
      • 6 Years Ago
      Why try to delay the inevitable trying to save the US auto industry the momentum is shifting for better or for worse. They are only making the process painful and lot more expensive.
      • 6 Years Ago
      It'll be interesting to see the devil in the details. The original legislation had fairly stiff income restrictions to qualify, something like only those with family incomes less than $75,000 would be eligible. In other words, the people most likely to buy a new car couldn't get a voucher to help!
      • 6 Years Ago
      This seems to be a very poor ldea, I wouldn't want to scrap my old car for any money, its served me well and would still be good transportation for a future owner, the increases in MPG hardly seem worth all the incentive.

      I can see the opportunity for some great scams here.

      Surely the waste produced making the new car would offset the gas savings they are trying to achieve, plus we have more waste from prematurely scrapped vehicles.

      I have a 20 yr old refrigerator Id like to replace, I'm sure its not energy efficient but still it works, Id buy a new one if the Govt scrapped my old one and sent me a check for 25% of the cost of a new one, I'm sure that industry is hurting too.
        • 6 Years Ago
        Thanks Richard I will keep that in mind, every bit helps.
        • 6 Years Ago
        Its not 25%, but still, the electric companies in many cities actually have programs like this that will pay you $50-100 for a non-energy-star rated fridge when you purchase a new one.
      • 6 Years Ago
      the last straw to try to save US auto industry? IMO you can't stop tsunami no matter how much US government tries, US automotive days are numbered. They are only making the process painful and lot more expensive.
        • 6 Years Ago
        Last straw to save the US auto industry?

        Asl yourself one question, why did Japan devalue the yen in 1995 by cutting their prime to a half percent?

        Your answer is: So they could continue to loot the US market and have us subsidize them at the same time.

        Notice how big the losses have been since we cut our rate?

        No that you understand how big a lie commerce with Asia has been why buy cars from liars? Screw Toyota and the rest. They really don't care at all.
        • 6 Years Ago
        DING! DING! DING!

        We have ourselves a winner!!!
        • 6 Years Ago
        "IMO you can't stop tsunami no matter how much US government tries"

        Credit where credit's due. Meanwhile, the Dow Jones is at it's highest since Jan.
      • 6 Years Ago
      Can't trade in our falling-apart S10 since it gets way over 18mpg. Your point is sound, but not all-encompassing.
      • 6 Years Ago
      What about Ford Explorers who's engines just exploded? Are those eligible?
      • 6 Years Ago
      Why don't the Socialist Democrats pay for poor people's new cars with their own personal funds in lieu of stealing from workers?

      Americans have had enough of this welfare state theft.
      The strongest, most productive Americans will leave this country and the remaining losers will have nobody to steal from anymore.

      The American Dream is over.
      Welcome to The Socialist People State of Obama.
        • 6 Years Ago
        Can you tell me when this supposed "Armageddon" is coming?

        Because they told me it would come as soon as Obama took over and I'm still waiting...
      • 6 Years Ago
      I love how so many people comment on these posts without actually reading the conditions of the program. Relax, your 30 mpg car doesn't qualify.
      • 6 Years Ago
      This bill is completely flawed (warning, some of it is sour grapes). Think about it:

      1. It rewards those people who made a bad decision and purchased a car that gets 18 mpg or less. Those people who cared about gas mileage and have old cars that get better than 18 mpg combined are out of luck. For example, I have a 1998 Ford Contour. It's probably worth $650 at trade in, so a $4,500 voucher would have been great for me. But I get jack squat.

      2. The kind of cars that get 18 mpg or less are mostly the bigger, heavy, expensive luxury cars (or mini vans) with thirsty engines. The problem is, these kind of cars are probably worth more than $4,500 in today's market. So why would you take the voucher, when you could get more money for your car by trading it in?

      So in a nutshell, my tax dollars are be used to subsidize those people who made bad decisions, but in the end won't they won't really benefit, because they'll probably not take advantage of the voucher program anyway. So now, that heavy, thirsty car has been traded in and it's just going to be resold and still on the streets getting 18 mpg or less. And my car too, will still be on the streets because I can't take advantage of the voucher.

      Am I right in this thinking?
        • 6 Years Ago
        @ jiro
        My 11 year old truck (tacoma) has 180000 miles on it and is probably worth 5500 (private sale). While it would qualify, why would I want to? I can get an extra grand, not be restricted to new vehicles as a replacement and someone else can get a reliable utility vehicle.

        I think I am the demographic for this bill, since I'm looking to buy a newer more fuel efficient car, but it just misses the mark for me. I am even a young professional who is still employed (for now) and can afford new car payments, but I know I'll still be on higher footing if I buy used and sell my "clunker".
        • 6 Years Ago
        No, you are very wrong.

        First, all cars that get traded in for the voucher need to be shredded or scrapped. So it will not be on the road.

        Your tax dollars aren't used to help people who made bad decisions. People who made bad decisions are driving around in newer SUV's or trucks that are already worth more than $4,500, you don't get both. If your car is worth $8500 you don't get an additional $4500, you get to choose :-)

        Why is this so hard for people to get?
        • 6 Years Ago
        MikeF, your Tacoma wouldn't be worth trading in, but neither would an 2009 Escalade which (I assume without bothering to look it up) would also qualify. I guess the premise is they are only trying to get the real bombs off the road. Any car still good enough to be worth over $4500 would be wasteful to scrap.
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