Monday, June 15, 2009
A federal plan designed to boost sales of automobiles with better gas mileage is getting closer to passing Congress, despite its uneven provisions for improving fuel efficiency. The Consumer Assistance to Recycle and Save and Act (CARS) will provide consumers with vouchers ranging from $3,500 to $4,500 for trading in their old vehicles for new cars or trucks that offer higher miles-per-gallon ratings. Based on data contained in the bill that passed the House of Representatives, Edmunds.com compiled a list of vehicles that would be eligible for the so-called “Cash for Clunkers” program.
According to Edmunds, owners of passenger cars or minivans that get 18 mpg or less could receive a $3,500 rebate for buying new cars or minivans with 22 mpg, and $4,500 for those with 28 mpg or higher. But owners of light-duty trucks would only have to purchase new trucks that get 20 mpg to receive the $3,500 voucher, and the threshold for large light-duty trucks is only 1 mpg over trade-ins that currently get 15 mpg.
Lawmakers hope CARS, which has passed in the Hoouse of Representatives and is currently being considered by the U.S. Senate, will prompt 500,000 to 1 million new auto sales. Edmunds experts, though, believe the plan will be lucky if it yields even half a million new sales. “A program intended to stimulate new car sales should target people in the market for a car, but the program does not,” says Edmunds.com CEO Jeremy Anwyl. “The only people who qualify are those willing to take no more than $4,500 for their current car and immediately buy a new one — quite a narrow profile.”
-Noel Brinkerhoff
Cash for Clunkers Car Buying Stimulus Bill (by Philip Reed, Edmunds)
List of Vehicles Eligible for the Cash for Clunkers Rebate (Edmunds) (PDF)
“Cash for Clunkers” Closer to Law (by Noel Brinkerhoff, AllGov)
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