In an effort to rid America’s roads of older gas-guzzling vehicles, Congress is considering a new plan that would offer drivers cash incentives to trade in fuel-inefficient vehicles for much thriftier rides. Dubbed “Cash for Clunkers”, the new bill was introduced in the House and Senate on Wednesday.
Under the bill, drivers would be eligible for up to $4,500 in incentives to be used towards the purchase of a new or used vehicle. In addition to cleaning up America’s roads, the bill is also seen as a way to jump start the struggling economy.
In order to qualify for the program, drivers would have to own a registered and running vehicle, with an as-new fuel economy rating of 18 mpg or less. Incentives would be based on the year of the car, with 2002 and newer vehicles receiving the full $4,500. Vehicles with model years between 1999 and 2001 would be eligible for $3,000, while 1998 and older model year vehicles would receive $2,000.
In order to ensure old gas guzzlers simply aren’t traded in on new gas guzzlers, purchased vehicles would have to have fuel economy ratings at least 25 percent better than the federal targets for that class, according to The Detroit News. Purchased vehicles could be no older than the 2004 model year, with a price cap set at $45,000.
The bill – which would cost between $1 billion and $2 billion per year — calls for a four year operating period, with the hopes of removing 1 million fuel-inefficient vehicles from America’s road.
However, the bill is not without opposition. Because the program would destroy any vehicles turned in, some industry experts have spoken out about the “Cash for Clunkers” program. The biggest concern is that the program will decimate the heart of the used car market that so many lower- and middle-income families depend on.
