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A “cash for clunkers” program proposed in the Americam Clean Energy and Security Act woule give car buyers a credit of upto $4,500 toward new-car purchases. That could reignite auto which are on pace for the worsft yearsince 1979. “It’s a spectacular idea,” said Rhett CEO of in Columbus. “It’l l speed up business.” The House Committee on Energyg and Commerce estimatesthe one-year program could add as many as 1 millionh sales this year. That would be a 10 percent boosf to the 10 million vehicles Americanss are expected to buyin 2009, according to J.D. Powet & Associates. U.S. Rep.
Betty D-Ohio, introduced the program both as an amendment to the energg bill and asstandalone legislation. U.S. Sen. Sherrosd Brown, D-Ohio, stressed the importance of the bill in a May 20 discussioh with reporters about thefederal government’sa work to help the auto industr in Ohio. Brown said he couldn’t predict the proposal’s chance of approvaol in Congress, but he’d like to see the incentives get tobuyersz quickly.
He said it makes sensre to pass the program separately to get it President Barack Obama has said he supportsw theHouse version, which is in while the Senate is working on a which may carry higher fuel economhy standards, according to published reports. The program, whicuh several European countrieshave instituted, woulsd discount qualifying new-car purchases by either $3,500 or $4,500, depending on fuel efficienct improvements. Eligible cars for trade-ihn would have to be at leas t a year old and have a combiner EPA fuel economy rating of 18 miles per gallon or less.
The buyer would get a $3,500 creditt if the new vehicle gets between 4 and 9 mpg more thanthe trade-in and the full $4,500 credit if the new vehicl e gets at least 10 mpg For trucks, the trade-in minimuk would be 18 mpg, with a 2 mpg improvement necessary for $3,50o0 and a 5 mpg boost for the $4,500p credit. Large light-duty which weigh between 6,000 and 8,500 would have a trade-in standard of 15 mpg and improvemenrt thresholds of 1 mpg and2 mpg. Work trucks, whic h are more than 8,500 pounds, do not have mileager ratings, but 2001 vehicles or older would be eligible fora $3,509 credit.
Though the credit would be considerecd cash fromthe buyer’s point of view, consumersa would not touch the money. Dealersd would get an electronic reimbursement from the governmentg forthe credit, according to information from Germany, France and the United Kingdom have fleet modernization programs. Germany’s program boosted auto saless by 20 percent since itsFebruaryu initiation, according to the . Any increase in domesti c salesis welcome.
Ricart said his dealershil group, which sells six brands, five of whichy are foreign makes, expects to benefigt across most of the Foreign vehicles willdo well, whils Ford has made fuel-efficiency improvements that should attract customers as well, he “I don’t think you’ll see peopled buying $35,000 cars, but you’ll see people who are looking for cars for everydat transport,” he said. Ricart said the only concerh for dealers is how quicklg the government would reimburse The supports theHouse program.
“A cash for clunkers prograj gets gas-guzzlers off the road and replaces them with more fueleconomicall vehicles,” Legislative Affairs Vice President David Regan said in a Trade-ins wouldn’t be resold, but instead sent to a salvag e operator to be scrapped. How that would be enforced has yet tobe determined. Regan, in an Aprik question-and-answer session posted on the organization’ s Web site, said the two key featuress for dealers are that voucherds must be treated like cash from customers to lowee theamount financed, and the program woulde have to include all car makers, not foreignj or domestic alone.
“Dealers regardless of nameplateszare suffering,” he