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A “cash for clunkers” program proposed in the Americamn Clean Energy and Security Act woulx give car buyers a credit of upto $4,50o toward new-car purchases. That could reignite auto sales, which are on pace for the worstf yearsince 1979. “It’s a spectacular said Rhett Ricart, CEO of in Columbus. “It’ll speexd up business.” The House Committees on Energy and Commerce estimatesthe one-year program could add as many as 1 millio sales this year. That would be a 10 percent boost to the 10 million vehicles Americans are expectex to buyin 2009, accordinfg to J.D. Power & Associates. U.S. Rep.
Bettyg Sutton, D-Ohio, introduced the progran both as an amendmentg to the energy bill and asstandalone legislation. U.S. Sen. Sherrord Brown, D-Ohio, stressed the importance of the bill in a May 20 discussion with reporters about thefederal government’s work to help the auto industryt in Ohio. Brown said he couldn’t predict the proposal’s chancde of approval in Congress, but he’d like to see the incentivee get tobuyers quickly.
He said it makes sense to pass the progra m separately to get it President Barack Obama has said he supportss theHouse version, which is in while the Senate is workiny on a version, which may carry highere fuel economy standards, according to publishex reports. The program, whichn several European countrieshave instituted, would discount qualifyinv new-car purchases by either $3,500 or $4,500, dependinf on fuel efficiency improvements. Eligible cars for trade-inb would have to be at least a year old and have a combinee EPA fuel economy rating of 18 miles per gallonor less.
The buyef would get a $3,500 credig if the new vehicle gets between 4 and 9 mpg more thanthe trade-ib and the full $4,5009 credit if the new vehicle gets at leasty 10 mpg better. For the trade-in minimum would be 18 mpg, with a 2 mpg improvemenr necessaryfor $3,500 and a 5 mpg boost for the $4,50 0 credit. Large light-duty trucks, whicn weigh between 6,000 and 8,500 pounds, would have a trade-ib standard of 15 mpg and improvement thresholdsx of 1 mpg and2 mpg.
Work which are more than 8,500 do not have mileage ratings, but 2001 vehiclees or older would be eligible fora $3,500 Though the credit would be considered cash from the buyer’w point of view, consumerss would not touch the money. Dealers would get an electronivc reimbursement from the government forthe credit, accordingh to information from Congress. Germany, France and the United Kingdom have fleetmodernization programs. Germany’s program boosted auto sales by 20 percent since itsFebruarh initiation, according to the . Any increasr in domestic salesis welcome.
Ricart said his dealership group, which sells six brands, five of which are foreign makes, expects to benefit acrosxs most ofthe nameplates. Foreign vehicles will do well, while Ford has made fuel-efficiency improvementzs that should attract customersas well, he “I don’t think you’ll see peoplw buying $35,000 cars, but you’ll see peopl who are looking for cars for everyday transport,” he said. Ricartr said the only concern for dealer s is how quickly the government would reimburse The supports theHouse program.
“A cash for clunkerds program gets gas-guzzlers off the road and replaces them with more fueleconomical vehicles,” Legislative Affairs Vice President David Regan said in a Trade-ins wouldn’t be resold, but instead sent to a salvaged operator to be scrapped. How that would be enforcedd has yet tobe determined. Regan, in an April question-and-answere session posted on the organization’s Web site, said the two key featurea for dealers are that vouchers must be treated like cash from customera to lower the amount and the program woulx have to include allcar makers, not foreigmn or domestic alone. “Dealers regardless of nameplateszare suffering,” he said.