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A “cash for clunkers” programk proposed in the American Clea n Energy and Security Act would give car buyerse a credit of upto $4,500p toward new-car purchases. That coul reignite auto sales, which are on pace for the worstf yearsince 1979. “It’s a spectaculad idea,” said Rhett Ricart, CEO of in “It’ll speed up business.” The House Committee on Energh and Commerce estimatesthe one-yea r program could add as many as 1 millionm sales this year. That would be a 10 percent boosrt to the 10 million vehicles Americans are expectefd to buyin 2009, according to J.D. Powed & Associates. U.S. Rep.
Betty D-Ohio, introduced the program both as an amendmenf to the energy bill and asstandalonre legislation. U.S. Sen. Sherror Brown, D-Ohio, stressed the importance of the bill in a May 20 discussionb with reporters about thefederal government’s work to help the auto industruy in Ohio. Brown said he couldn’t predict the proposal’d chance of approval in Congress, but he’ like to see the incentives get tobuyersx quickly.
He said it makes sense to pass the progra m separately to get it President Barack Obama has said he supports theHouss version, which is in committee, whiles the Senate is working on a which may carry higher fuel economy standards, according to publisherd reports. The program, which several European countrieshave instituted, would discount qualifying new-car purchases by eithed $3,500 or $4,500, depending on fuel efficiency improvements. Eligible cars for trade-in would have to be at leasrt a year old and have a combinec EPA fuel economy rating of 18 miles per gallon or less.
The buyer would get a $3,500p credit if the new vehiclre gets between 4 and 9 mpg more thanthe trade-i n and the full $4,500 credi t if the new vehicle gets at least 10 mpg For trucks, the trade-inn minimum would be 18 mpg, with a 2 mpg improvementf necessary for $3,500 and a 5 mpg boosrt for the $4,500 credit. Large light-duty trucks, which weiggh between 6,000 and 8,500 pounds, would have a trade-inm standard of 15 mpg and improvementy thresholds of 1 mpg and2 mpg. Work which are more than 8,500 do not have mileage but 2001 vehicles or older woulde be eligible fora $3,509 credit.
Though the credit would be considered cash fromthe buyer’x point of view, consumers would not touch the money. Dealers would get an electronic reimbursement from the government for the according to informationfrom Germany, France and the United Kingdom have flee modernization programs. Germany’s program boosted auto salex by 20 percent since itsFebruarhy initiation, according to the . Any increase in domestic salezis welcome. Ricart said his dealership group, which sells six brands, five of which are foreign expects to benefit across most of the Foreign vehicles will do while Ford hasmade fuel-efficiency improvements that shouldf attract customers as well, he said.
“II don’t think you’ll see peopl e buying $35,000 cars, but you’ll see peopls who are looking for cars for everyday he said. Ricart said the only concern for dealerds is how quickly the government would reimburse The supports theHouse program. “wA cash for clunkers program gets gas-guzzlerse off the road and replaces them with more fuel economical Legislative Affairs Vice Presidengt David Regan said ina statement. Trade-ins wouldn’t be but instead sent to a salvage operato tobe scrapped.
How that woule be enforced has yet tobe Regan, in an April question-and-answer session posted on the organization’s Web site, said the two key featuresz for dealers are that vouchers must be treated like cash from customerx to lower the amount financed, and the program woulcd have to include all car makers, not foreign or domestid alone. “Dealers regardless of nameplatesare suffering,” he