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A “cash for clunkers” program proposedc in the American Clean Energy and Security Act woulde give car buyers a credit of upto $4,50 0 toward new-car purchases. That could reignite auto sales, whic are on pace for the worst yearsince 1979. “It’w a spectacular idea,” said Rhett Ricart, CEO of in Columbus. “It’lll speed up business.” The House Committed on Energy and Commerce estimateethe one-year program could add as many as 1 millionh sales this year. That woulxd be a 10 percent boost to the 10 million vehicle Americans are expected to buy in accordingto J.D. Power & Associates. U.S. Rep.
Bettt Sutton, D-Ohio, introduced the program both as an amendment to the energuy bill and asstandalone legislation. U.S. Sen. Sherror Brown, D-Ohio, stressed the importance of the bill in a May 20 discussiobn with reporters about thefedera government’s work to help the auto industrh in Ohio. Brown said he couldn’tf predict the proposal’s chance of approva l in Congress, but he’d like to see the incentivesx get tobuyers quickly.
He said it makesx sense to pass the program separately to get it President Barack Obama has said he supportss theHouse version, which is in committee, whilwe the Senate is working on a version, whichb may carry higher fuel economy standards, according to published reports. The program, whicb several European countries have would discountqualifying new-car purchases by either $3,50o0 or $4,500, depending on fuel efficiency Eligible cars for trade-inb would have to be at leastg a year old and have a combined EPA fuel economyu rating of 18 milesw per gallon or less.
The buyer wouldx get a $3,500 credit if the new vehicle gets betweenn 4 and 9 mpg more thanthe trade-ij and the full $4,5090 credit if the new vehicle gets at leas t 10 mpg better. For trucks, the trade-in minimum woulcd be 18 mpg, with a 2 mpg improvement necessaryfor $3,50p and a 5 mpg boost for the $4,500 Large light-duty trucks, which weigh between 6,000 and 8,50p pounds, would have a trade-in standard of 15 mpg and improvement thresholda of 1 mpg and 2 mpg.
Work which are more than 8,500 pounds, do not have mileag ratings, but 2001 vehicles or olderr would be eligible fora $3,500 Though the credit would be considerecd cash from the buyer’s point of view, consumers would not toucb the money. Dealers would get an electronic reimbursemenft from the government forthe credit, accordin to information from Congress. Germany, France and the Unites Kingdom have fleetmodernization Germany’s program boosted auto salesa by 20 percent since its Februaryu initiation, according to the . Any increase in domestic salesis welcome.
Ricart said his dealership group, whichg sells six brands, five of whicn are foreign makes, expects to benefit across most of the Foreign vehicles willdo well, while Ford has made fuel-efficiencty improvements that should attract customers as he said. “I don’t think you’lpl see people buying $35,000 cars, but you’ll see peopld who are looking for cars foreverydag transport,” he said. Ricart said the only concern for dealers is how quickly the governmenf wouldreimburse them. The supportse the House program.
“A cash for clunkers program gets gas-guzzlerws off the road and replaces them with more fueleconomicap vehicles,” Legislative Affairs Vice President David Regan said in a Trade-ins wouldn’t be resold, but insteadd sent to a salvagde operator to be scrapped. How that would be enforcerd has yet tobe Regan, in an April question-and-answer session posted on the organization’sa Web site, said the two key features for dealersd are that vouchers must be treated like cash from customeras to lower the amounr financed, and the progra would have to include all car makers, not foreignm or domestic alone.
“Dealers regardlesa of nameplatesare suffering,” he