The idea of a “cash-for-clunkers” program has been floating around Washington for some time now, but Congressman John D. Dingell of Michigan may have penned the proposal that finally gets signed into law. Dingell’s plan would give buyers up to $4,500 towards the purchase of a new vehicle.
Dingell announced earlier on Tuesday that an agreement had finally been reached in the House of Representative. “Today’s announcement that my colleagues in the House of Representatives and I have struck an agreement on a vehicle fleet modernization program could not have come at a more opportune time,” Dingell said in a statement. “By stimulating consumer demand for new vehicles, this proposal will directly benefit domestic autoworkers and automotive manufacturers, which have arguably been hardest hit by the current economic downturn.”
However, Dingell’s plan seems to raise more questions than it answers. One of the sticking points of the cash-for-clunkers proposal is whether than program should apply to only vehicles built in North America or be open to all vehicles, regardless of point of origin. Dingell’s plan never directly addresses that issue, using language that could point in either direct. Some parts of the proposal simply say “new vehicles” while other specifically identify the domestic automakers.
Additionally, Dingell’s plan doesn’t seem to have any vehicle age requirements, save for the fourth category of “Work Trucks”, or vehicles weighing between 8,500 and 10,000 pounds.
At any rate, this is how the proposal breaks down:
Passenger vehicles
- In order to qualify, the old vehicle must average less than 18 mpg, per the new EPA ratings
- Qualifying new vehicles must achieve at least an EPA combined 22 mpg
- A $3,500 voucher will be given for new vehicles achieving at least 4 mpg better than the old vehicle
- A $4,500 voucher will be given for new vehicles that achieve at least 10 mpg better than the old vehicle
Small trucks and SUVs
- In order to qualify, the old vehicle must average less than 18 mpg, per the new EPA ratings
- A $3,500 voucher will be given for new vehicles achieving at least 2 mpg better than the old vehicle
- A $4,500 voucher will be given for new vehicles that achieve at least 5 mpg better than the old vehicle
Large light-duty trucks
- In order to qualify, the old vehicle must average less than 18 mpg, per the new EPA ratings
- The new vehicle must average 15 mpg or better
- A $3,500 voucher will be given for new vehicles achieving at least 1 mpg better than the old vehicle
- A $4,500 voucher will be given for new vehicles that achieve at least 2 mpg better than the old vehicle
05/05, 3:32 PM
posted by:
blue1996
what happens to the trade ins and does the dealer pay for the trade ins or the goverment,i guess the united states goverment is getting into the automotive buisness lol
05/05, 3:34 PM
posted by:
save saab
They should include: If the car is desirable in the collector’s market, it should be fixed, or sold as parts, not scrapped.
05/05, 3:36 PM
posted by:
JakeK66
So let me get this straight – I’m giving MY money to someone else to buy a new car because they were too cheap to buy one before? If they can’t afford $25,000, they can’t probably afford $21,500 either, so in reality we are just urging people to get themselves in more debt and create more bad debt for the struggling financial industry. Awesome plan you guys. No wonder your approval rating is around 20%. 2010 is going to be a fun election!!!
05/05, 3:48 PM
posted by:
Borat
Jake, you got it! The way out of the bad debt and toxic assets crisis is more and more bad debt!
05/05, 4:07 PM
posted by:
krftwrk
It’s an incentive to get old, cr@ppy cars off the road and stimulate sales. Many of which are exempt from emissions standards. If I were considering a new car right now, $3.5-4.5K would make the decision that much easier. Machines wear out and need replacement. Either in part or whole.
05/05, 4:48 PM
posted by:
Impulsive
Hmmmmmmm, the way LLN has pointed it out, the vehicle (passenger) being traded in must average
LESS than 18 mpg … so anyone with a ten-year-old compact running at 27 mpg is OUT OF LUCK?
Wow, if true … only gas guzzlers are permitted for the trade?
05/05, 4:50 PM
posted by:
jackjimturkey
Yawn.
I think there should be some provision requiring proof of ownership before the law was passed.
05/05, 5:00 PM
posted by:
MJvwGTI
nooooo!!! i am trying to sell my 2007 car – this will flood the used car market! arg
05/05, 5:10 PM
posted by:
mayer_ray_nagin
In my opinion the biggest clunker saddling the USA is our federal government and I will gladly trade that in and get money back. Freakin idiot politicians
05/05, 5:58 PM
posted by:
S1L1SC
Time to buy one of those $500 SUV’s that are 15-20 years old… Trade In time.
05/05, 6:27 PM
posted by:
yarddog82abn
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05/05, 6:59 PM
posted by:
JakeK66
S1L1SC -
Those values will skyrocket because of this, so if you plan on doing that, better do it quick!
05/05, 7:06 PM
posted by:
A4
seriously… i want that leftover GLI. 4500 bucks sounds prime.
05/05, 7:33 PM
posted by:
DrFill
What kind of monkey crap is this?
Why would cars and trucks have the same MPG threshold?
How many passenger cars get a trucks EPA?
Not many
How many cars average less than 18 MPG?
Now I have to dig up a Buick Roadmaster?
Did they say the old truck must get less than 18MPG, and the new truck must get 15 MPG?
WTF?
DrFill
05/05, 9:54 PM
posted by:
elviososa
Do those politicians have brains???? or they have their ass up as their brains???
05/06, 11:35 AM
posted by:
shaver
They should call it the new full-size truck and large SUV stimulus bill.
This is as big a sham as the business right off for “cars” over 6,000 #s that has flower delivery and RE agents driving Excursions and Super Duties.
Anyways, my dad gave me his 94 Dodge Ram for my daughter as her 1st car. I guess it just got a whole lot more valuable.
05/06, 12:07 PM
posted by:
leftwingagenda
some of your complaints would make sense if the financial crisis was based on bad car loans and millions of people defaulting on those loans, but that’s not the case…remember, guys, *housing* crisis…people were buying cars they couldn’t afford using equity in their home that didn’t really exist, but that auto debt is orders of magnitude less than the total mortgage debt affected by the housing crisis…
i frankly don’t see this as a plan to burden people with more bad debt, although honestly it’s up to the consumer (not the government) to make choices that are fiscally responsible…if we as a nation can’t balance our personal checkbooks, that’s on us, the government didn’t force anybody into these idiotic financial decisions…it just has to deal with the consequences…
also, you guys are completely missing the point that this program has been in operation in europe with success…i repeat, with success…the sky isn’t falling, kids…
05/06, 3:08 PM
posted by:
Impulsive
The way I’m reading this, it isn’t a “clunker” program … it’s a “poor mileage behemoth” program … excluding regular passenger vehicles OVER 18 mpg is what IS needed instead.
05/06, 10:35 PM
posted by:
Renton
This good for me. I have a 20 y/o Cherokee that is beginning to hit the wall. Gets about 10 mpg too.
Trade it in on a Honda Fit. No brainer.
Just pass the law already.
05/07, 12:17 AM
posted by:
sharpie
They should rename it “cash-for-chunkers” or “cash for guzzlers” program. Call it what it is.
05/16, 11:40 AM
posted by:
rdp
This Law is discriminatory, and despite the claims the purpose is not to save energy and the environment, but rather to save the energy guzzlers built by Detroit. An impartial law that would save energy, protect the environment and stimulate the economy should take into account that some cars now achieve ~40mpg or better. The 18mpg limit prevents most consumers, who have avoided these energy guzzlers even before it was fashionable, from taking advantage of this law. The new 22mpg target is ridiculously low. This is another massive tax transfer to reward irresponsibility.
To attain the alleged objectives, the law must be open to ANY vehicle, independent of automaker and EPA ratings, as long as the newly purchased vehicle achieves a gain of 7mpg ($3,500 voucher), with the $4,500 voucher for those who achieve 10mpg or better. Of course, the Honda Fit, Insight and Toyota Prius would be the real beneficiaries of such a law, and this would not be acceptable to the Congressman from Michigan.