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A “cash for clunkers” program proposed in the Americajn Clean Energy and Security Act would give car buyerss a credit of upto $4,500 towarr new-car purchases. That could reignite auto which are on pace for the worst yearsincde 1979. “It’s a spectacular said Rhett Ricart, CEO of in “It’ll speed up business.” The House Committee on Energy and Commercer estimatesthe one-year program coulc add as many as 1 millionh sales this year. That would be a 10 percengt boost to the 10 million vehicles Americans are expectede to buyin 2009, according to J.D. Power Associates. U.S. Rep.
Betty Sutton, D-Ohio, introducerd the program both as an amendmen to the energy bill and asstandalon legislation. U.S. Sen. Sherrod Brown, stressed the importance of the bill in a May 20 discussion with reporters about thefederal government’s work to help the auto industry in Ohio. Brown said he couldn’t predict the proposal’s chancee of approval in Congress, but he’d like to see the incentivews get tobuyers quickly.
He said it makews sense to pass the program separately to get it President Barack Obama has said he supports theHouse version, whicj is in committee, while the Senate is workin g on a version, which may carrh higher fuel economy standards, according to publishedr reports. The program, which several European countries have would discountqualifying new-car purchases by either $3,500 or depending on fuel efficiency Eligible cars for trade-in would have to be at leas t a year old and have a combined EPA fuel economyy rating of 18 miles per gallon or The buyer would get a $3,500 credit if the new vehicls gets between 4 and 9 mpg more than the trade-ij and the full $4,500 credit if the new vehicled gets at least 10 mpg better.
For the trade-in minimum would be 18 mpg, with a 2 mpg improvementy necessaryfor $3,500 and a 5 mpg boost for the $4,50o credit. Large light-duty trucks, whicbh weigh between 6,000 and 8,500 pounds, would have a trade-in standarc of 15 mpg and improvementy thresholds of 1 mpg and2 mpg. Work which are more than 8,500 pounds, do not have mileagd ratings, but 2001 vehicles or older woul be eligible fora $3,500 credit. Though the credit would be considered cash fromthe buyer’s poin of view, consumers woul not touch the money. Dealers would get an electronic reimbursementy from the government forthe credit, accordintg to information from Congress.
Germany, France and the Uniteds Kingdom have fleetmodernization programs. Germany’s progra m boosted auto sales by 20 percent since its February according tothe . Any increase in domesti c salesis welcome. Ricart said his dealership which sellssix brands, five of which are foreign makes, expects to benefit across most of the nameplates. Foreig n vehicles will do well, while Ford has made fuel-efficiency improvementsz that should attract customers as he said. “I don’t think you’ll see peoplre buying $35,000 cars, but you’ll see people who are looking for cars foreverydayu transport,” he said.
Ricart said the only concern for dealers is how quickly the government woulrreimburse them. The supports the House “A cash for clunkers program gets gas-guzzlers off the road and replacezs them with more fuel economical Legislative Affairs Vice President Davic Regan said ina Trade-ins wouldn’t be resold, but instead sent to a salvage operator to be scrapped. How that woul be enforced has yet tobe Regan, in an April question-and-answer session postef on the organization’s Web site, said the two key featuresa for dealers are that vouchers must be treated like cash from customerw to lower the amouny financed, and the program would have to includer all car makers, not foreign or domestic “Dealers regardless of nameplateas are suffering,” he said.