The Cash For Clunkers program, officially known as CARS, is a program in flux. If you missed the CARS news over the weekend, read this post. Here's what has happened since then:
- The White House was pushing the Senate to act today, making it very clear that CARS has pushed average mpg numbers up by "nearly 10 miles per gallon" for the new cars over the clunkers that were scrapped. Transportation Secretary Ray LaHood wouldn't say what would happen if the Senate doesn't match the House's extra billions for CARS, saying simply, "I believe the Senate will pass it this week." Reuters is reporting that the program may be suspended some time this week if the Senate doesn't approve the funds.
- The IRS says that those $3,500 or $4,500 rebates will count as taxable gross income. Customers will get a pass, but dealers will have to pay some of the money back in taxes.
- Chrysler has had such luck with its CARS deal – the company added $4,500 to the government's $4,500 for a massive discount of up to $9,000 – that it has almost run out of cars to sell. That's the good news. The bad is that Chrysler is taking the additional $4,500 offer off the table.
- The Auto Alliance came out strongly in favor of C4C, saying it was " Good for the Economy, Better for the Environment." Read their statement after the jump.
[Source: Autoblog, Automotive News (subs req'd), AP, Auto Alliance]
Photo by emilio labrador. Licensed under Creative Commons license 2.0.
PRESS RELEASE:
Cash for Clunkers: Good for the Economy, Better for the Environment
President Barack Obama-"Not more than a few weeks ago, there were skeptics who weren't sure that this "Cash for Clunkers" program would work. But I'm happy to report that it has succeeded well beyond our expectations and all expectations."
House Select Committee on Global Warming Chairman Congressman Ed Markey (D-MA)--"This program has proven to be the ultimate triple play: It is good for the economy, good for energy independence and great for consumers."
House Appropriations Committee Chairman David Obey (D-WI) –"Some would call this letting the markets work! Consumers have spoken - with their wallets - and they're saying that they like this program. And clearly, it's doing what it was intended to do – to spur car sales in this sluggish economy."
Congressman John Campbell (R-CA) "It is the one thing that we have done here in this Congress that is absolutely working. It is creating jobs, and we want it to do more."
Automakers and automobile dealers have seen a significant increase in vehicle sales and dealership foot traffic since the launch of the CARS or "Cash for Clunkers" program. This increase in vehicle sales is generating important tax revenue for communities where in some cases roughly one-quarter of sales tax revenue is dependent on receipts from auto sales. And while the program has provided much need economic stimulus to the auto industry, it has also yielded significant energy security and environmental benefits.
Amongst Alliance members Ford reports a 9 MPG increase from trade-in vehicle to new vehicle purchase; GM reports a 54 percent increase in small car sales since the CARS program was launched; 57 percent of Mazdas sold so far under the program were highly fuel-efficient Mazda 3's; 78 percent of Toyota's CARS sales volume consists of the following vehicles -- Corolla, Prius, Camry, RAV 4 and Tacoma, which average a combined 30 MPG; and Volkswagen reports over 60 percent of its CARS sales are clean diesel Jetta TDI's which get an EPA combined 34 MPGs.
Assuming that half of the vehicles sold using the CARS program qualify for the 4 MPG-$3500 credit and the other half qualify for the 10 MPG-$4500 credit, CARS would provide an annual fuel savings of 45 million gallons of gasoline or an average gasoline savings of $450 a year for each new vehicle owner.
That equates to an approximate 500,000 ton reduction in carbon dioxide emissions greatly enhancing energy security and reducing greenhouse gases.
We strongly urge the Senate to approve $2 billion in additional funding for the CARS program so that American consumers can continue to take advantage of these benefits.
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The Alliance is a trade association of eleven car and light truck manufacturers including BMW Group, Chrysler LLC, Ford Motor Company, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi Motors, Porsche, Toyota and Volkswagen.
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