Cash for Clunkers Update
Thinking of buying a new car soon? If so, you’ll want to pay careful attention to the “Cash for Clunkers” pending legislation in Congress.
In April we wrote about the possibility of this new legislation, and at that time lawmakers were discussing a credit for up to $5,000 when trading in vehicles older than 2001.
Earlier this week, the House of Representatives passed their version of the Cash for Clunkers program. Now the Senate will address the bill. Once the Senate takes action we will post more on this topic.
Here are the details of the House’s proposal, according to Consumer Reports:
As it is currently structured, the plan would give vouchers worth $3,500 to anyone who trades in a car that has a combined EPA rating of 18 mpg or less on a new one that has a combined EPA rating of 22 mpg or more. If the old vehicle is replaced with a new one that gets at least 10 mpg more than it does, the voucher would increase to $4,500. (You can find EPA fuel economy ratings on cars back to 1985 at fueleconomy.gov.)
Trucks and SUVs are eligible for vouchers if they get no more than 18 mpg and are replaced with a vehicle that gets at least two mpg more than the old one. The voucher would increase to $4,500 if the new vehicle gets four mpg more than the old one. Other provisions apply to larger medium-duty work trucks.
Dealers would have to verify that the old car will be crushed rather than resold. Since the old vehicles would have to be scrapped, dealers wouldn’t offer any trade-in money. So in reality, the provision would only make sense for vehicles worth less than $3,500.
Cash For Clunkers at Milwaukee Area Car Dealers?
Thinking about buying a new car soon? We suggest you watch Congress to see if they pass a Cash-For-Clunkers bill. Bloomberg.com recently reported that backers of a Cash-For-Clunkers bill want to speed the measure through Congress when they return from their recess this week. The bill might result in consumers receiving vouchers for up to $5,000 when trading in vehicles from 2001 or earlier in order to purchase a new car. For more details on the issues Congress is looking at, read the Bloomberg article. We’ll post more if Congress acts on this idea.
Steven Levitt, one of the authors of popular book Freakonomics, believes that a Cash-For-Clunkers program would be a bad idea. Read his thoughts on his Freakonomics blog.
And since it’s Earth Day, it’s only appropriate that we include a link to a story by the Christian Science Monitor that examines some environmental issues associated with a Cash-For-Clunkers program.