Photos: Clunker from fitsnew.com, Ford Fusion Hybrid from gogreenpark.com
There are currently four bills in Congress focused on stimulating car sales by allowing people to trade an old car for a new one. There's been lots of buzz, but not so many details. That's starting to change as people such as Rep. Betty Sutton goes on the offensive for her own proposal .
There are currently four different proposals in Congress to stimulate stimulate car sales by way of incentives from the government to buy older, less fuel-efficient vehicles. Three are from the House of Representatives and one from the Senate . Already the topic has lit up the blogosphere with buzz about the opportunity for people to get $3,000.00 to $5,000.00 for exchanging that junker for a shiny, new automobile. Rep. Betty Sutton was on CNBC's Squawk on the Street today talking about her version of the bill. With an official title of "To accelerate motor fuel savings nationwide and provide incentives to registered owners of high polluting automobiles to replace such automobiles with new fuel efficient and less polluting automobiles or public transportation" it's easy to see why few details are in the media as of yet. The bill's short title as introduced is Consumer Assistance to Recycle and Save Act of 2009. Anchors Mark Haines and Erin Burnett posted questions about how the proposal may work.
Leader in the Pack
Rep. Sutton's Consumer Assistance to Recycle and Save (CARS) Act would give consumers incentives of $3,000 to $5,000 for turning in vehicles that are 8 years or older to buy more fuel-efficient vehicles or to obtain a transit voucher. She says that support is growing every day. The bill has gathered 21 co-sponsors so far, up from 19 a couple of weeks ago. The bill is still working out the metric of how cars would need to be traded in and what fuel efficiency would need to be for the new car. Sen. Dianne Feinstein has a similar proposal (with a short title of Accelerated Retirement of Inefficient Vehicles Act of 2009) that would mandate that the new car be 25% above CAFE standards . There has not been anything mentioned about how many cars one person or family can switch for the credit. Also, some states already have incentives for buying cleaner cars, so will individuals be able to get both state and federal credits? If so, in places like Texas , a person could get a combined total of as much as $8,500.00 for a new car.
Some Details, More to Come
One stipulation that is clear is where the vehicle needs to be assembled. Rep. Sutton's stressed that it must be assembled in Canada, the United States or Mexico. That means that you could get a vehicle from a foreign car company such as Toyota with a factory in, say, Kentucky building fuel-efficient automobiles would be eligible within the bill for the credit. Sorry Prius fans, as of right now, Priores aren't made in North America.
Another provision that is straightforward is what kinds of cars can be traded in. The short answer, any kind at all. The company can be either foreign or domestic and could have been assembled in Mexico or China as long as they meet the age requirement.
Comparable policy was passed in Germany which supported increases of automobile sales by 21% in February and 40% in March, 2009. Compare that with US sales down by 37% in March. The overall goals are to stimulate the economy, replace gas-guzzlers and reduce emissions by way of a governmental/market partnership.
Critics of the bill such as John Wolkonowicz, of Global Insight, thinks trying to reduce emissions, improve the environment and stimulate the economy is taking on too many "objectives" at once. All I can say is .ah, yeah, that's the point!
More on Incentives and Cash for Clunkers:
Obama to Automakers: Make Greener American Cars or Go Under
Senate Votes Down Green Incentives
Renewable Energy Incentives Stalled in Senate
"Cash for Clunkers" Gains Momentum in Congress