Cash for Clunkers passes Congress, awaits President's signature
After narrowly surviving an attempt by Sen. Judd Gregg, R-N.H. to strip it from a war-spending bill, the Cash for Clunkers program passed the Senate yesterday evening. Well, the $106 billion war-spending bill passed the Senate on a 91-5 vote, but the $1 billion scrapping program earlier survived Sen. Gregg's attempt to have it removed and thus passed, as well. Now the bill makes its way to President Obama, who is expected to sign the bill into law, after which the U.S. Transportation Department reportedly has one month to figure out how the Cash for Clunkers program will be run. Since Congress reduced funding for the program from $4 billion to just $1 billion, it's expected that the money will run out long before the program is scheduled to end on November 1.
The Cash for Clunkers program is intended to aid automakers and their dealers, including imports, by offering vouchers worth between $3,500 and $4,500 to car buyers willing to trade in their old vehicles for new, more fuel efficient ones. The program's eligibility rules, however, are stiff. Trade-in vehicles have to be in drivable condition, insured by the same owner for the last year, manufactured in 1984 or later and have a combined EPA fuel economy rating of 18 mpg or less.
The new car being purchased must also achieve at least 22 mpg combined in order to receive the $3,500 voucher and be 10 mpg better than your trade-in to earn the $4,500 voucher. For light trucks and SUVs, the new vehicle must get 2 mpg better than the old one for $3,500 and 5 mpg better for $4,500. Reported estimates say around 250,000 car shoppers will be able to take advantage of the program, so don't sell your clunker on Craigslist if you want to be one of them.
[Source: The Detroit Free Press | Photo by Kevin Burkett | CC2.0]
Reader Comments (Page 1 of 3)
User 1:06PM (6/19/2009)
18 -> 22 mpg combines gets you $3,500 from a severely debted country?
Wow. Not nearly strict enough.
Reply
Arden 1:32PM (6/19/2009)
No Joke. A 4mpg improvement? Yet I cannot clunker my 21mpg buick century for a 40mpg fit or fiesta?
Nightcrawler 1:57PM (6/19/2009)
What 40 mpg Fit or Fiesta? The Fit isn't rated for even close to 40 mpg, and I doubt the Fiesta will be either. In any event the money for this program will run out long before you can buy a new Fiesta in the U.S.
geo.stewart 2:46PM (6/19/2009)
oh, look there goes my money again...
Kumar 3:10PM (6/19/2009)
Yeah, that much money for a small increase in mpg is bad. It's the only way this bill passed though. If every replacement vehicle had to get >= 27 mpg, then the domestics would be screwed for the most part.
Yes, the domestics have several vehicles rated at or above 27 mpg, but the sales would be skewed towards foreign badges, and that wouldn't sit well being funded by our tax bucks.
A great indicator of which Big three company will be around in 2 or 3 years is how they respond to increased sales of 08-09 suvs and pickup trucks. If they increase production of those vehicles, they will fail. If they acknowledge it's an inventory reduction, and keep on making more efficient vehicles, they will probably survive.
yakapo 1:08PM (6/19/2009)
"For light trucks and SUVs, the new vehicle must get 2 mpg better than the old one for $3,500 and 5 mpg better for $4,500."
what if I have a truck that gets 17 miles per gallon and I trade it in for a car? Do I get $4500 for a 5 mpg increase? Or do I have to buy another truck?
Reply
Nightcrawler 2:04PM (6/19/2009)
I matters what you buy, not what you trade-in, to determine how much you get. If you are buying a passenger car, you get $3500 if...
"the new fuel efficient automobile is a passenger automobile and the combined fuel economy value of such automobile is at least 4 miles per gallon higher than the combined fuel economy value of the eligible trade-in vehicle"
To get the full $4500 while buying a passenger car, you'd have to buy a car that gets 10 mpg better than the old vehicle, or 27 mpg in your case. But you could buy some small car-based SUV, like a Subaru Forester for example, and get the full $4500 because you only have to increase efficiency by 5 mpg for a truck to get $4500.
That's the dumb part. It encourages you to buy an SUV over a car. In your case you'd get more money buying a 22 mpg Forester than a 25 mpg sedan. The should have just said 5 mpg improvement gets you $3500, and 10 mpg improvement gets you $4500, regardless of whether you are buying a car or a truck.
Ben 1:12PM (6/19/2009)
Forgive me on this dumb question, but if you trade your vehicle in at a dealership, you get the voucher on top of the trade in value correct?
Reply
compy386 1:15PM (6/19/2009)
No your vehicle will be crushed into a cube. It's trade in value is zero.
Nightcrawler 2:06PM (6/19/2009)
Yeah, it's only for really old clunkers that are so bad they shouldn't really be on the road. It would be really stupid if they gave you the money plus the trade-in value for a 2 year old Escalade, and then crushed it.
Erik 1:13PM (6/19/2009)
This makes me want to puke
Reply
skiracer123 1:21PM (6/19/2009)
Doh, my 1998 Honduh Accord V6 with 200K miles on the odometer won't qualify :( According to http://www.fueleconomy.gov/ my combined fuel economy is 21MPG. I need 18MPG or less to qualify :(
In reality, i'm sure my MPG is much less than the factory numbers when the car is new...
Reply
XJ 1:21PM (6/19/2009)
Really sorry for the unrelated comment, but did Autoblog change their font settings? I'm seeing words a lot bigger than they used to be, and I'm not sure if it's because I've been messing with the resolution on my monitor this morning. Thanks.
Reply
CBXweb 1:25PM (6/19/2009)
Hold Shift, and press the down key, could help.
LOL, one could only hope he would look at the bill and say that the a 18MPG is too low.. maybe some of us drive crappy economy cars :/, but nevertheless, this bill is kinda outrageous.
poke1647 1:27PM (6/19/2009)
according to fueleconomy.gov, my 13 yr old plymouth voyager got a 20 mpg city/hwy combined rating, now it gets nowhere near that number! it sucks if that's how they determine ur old car's mpg, following the original EPA rating!
Reply
Jake 1:28PM (6/19/2009)
Because this definitely belongs in a war spending bill.
More stupid spending of non-existent money by an incompetent government.
Reply
Luis 1:36PM (6/19/2009)
Yeah, I think the trillion+ we've spent in Iraq is far more outrageous.
Thank you very much.
Mr.Oak 2:01PM (6/19/2009)
Jake, a couple of things, Luis is right.
The same folks that cry about this bill, are mum of the trillion $ and counting tab for Iraq. BTW: when the war ends, the tab keeps running, still gotta take care of all the broken soldiers. Most of them are under 25 years old.
Back on topic, This bill serves two purposes.
1. It is aimed at reducing the fuel consumption of the National fleet.
2. It gets folks back into the showrooms. Which helps our mortally wounded economy.
CB 2:14PM (6/19/2009)
@ Luis
Terrible argument.
Why does one waste of money mean we should waste more?
2 stupid ideas are better than 1?
Any help to the economy caused by this will be more than offset by the inflation from printing money to fund it and the taxes on our children and grandchildren to pay of the massive increases in national debt created by this irresponsible administration and congress.
Echy 2:02PM (6/19/2009)
The trade in value is zero? There goes my plan.
Reply