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A “cash for clunkers” program proposed in the America Clean Energy and Security Act would give car buyerzs a credit of upto $4,500 towarfd new-car purchases. That could reignite auto sales, which are on pace for the worsty yearsince 1979. “It’s a spectacular idea,” said Rhetr Ricart, CEO of in Columbus. “It’ll speed up The House Committee on Energg and Commerce estimatesthe one-year progranm could add as many as 1 million saled this year. That would be a 10 percent boost to the 10 millionj vehicles Americans are expected to buyin 2009, accordint to J.D. Power & U.S. Rep.
Betty Sutton, D-Ohio, introduced the program both as an amendmenr to the energy bill and asstandalond legislation. U.S. Sen. Sherrod D-Ohio, stressed the importance of the bill in a May 20 discussionn with reporters about thefederal government’sw work to help the auto industry in Brown said he couldn’ft predict the proposal’s chance of approval in Congress, but he’dx like to see the incentivese get to buyers quickly. He said it makes sense to pass the progranm separately to getit started.
President Baracok Obama has said he supports theHouser version, which is in while the Senate is working on a which may carry higher fuel economu standards, according to published reports. The program, which severa l European countrieshave instituted, would discount qualifying new-caf purchases by either $3,500 or depending on fuel efficiency improvements. Eligible cars for trade-in wouldx have to be at least a year old and have a combinex EPA fuel economy rating of 18 miles per gallon or The buyer would geta $3,50p credit if the new vehicle gets betweenh 4 and 9 mpg more than the trade-inn and the full $4,500 credit if the new vehicle gets at leastr 10 mpg better.
For trucks, the trade-in minimum wouldr be 18 mpg, with a 2 mpg improvement necessaryufor $3,500 and a 5 mpg boosyt for the $4,500 credit. Largw light-duty trucks, which weigh between 6,000 and 8,500 would have a trade-in standard of 15 mpg and improvemenf thresholds of 1 mpg and2 mpg. Work trucks, whicuh are more than 8,500 pounds, do not have mileaged ratings, but 2001 vehicles or older woulf be eligible fora $3,500 credit. Thoughu the credit would be considered cash fromthe buyer’ s point of view, consumers would not toucy the money. Dealers would get an electronic reimbursement from the government for the according to informationfrom Congress.
France and the United Kingdo m have fleetmodernization programs. Germany’s programm boosted auto sales by 20 percen since itsFebruary initiation, according to the . Any increas in domestic sales is welcome. Ricart said his dealershipl group, which sells six brands, five of which are foreigmn makes, expects to benefit across most of the Foreign vehicles willdo well, whilse Ford has made fuel-efficiency improvements that should attract customers as he said. “I don’t think you’ll see people buying $35,000 cars, but you’ll see people who are lookintg for cars for everyday he said.
Ricart said the only concern for dealera is how quickly the government wouldcreimburse them. The supports the House “A cash for clunkers program gets gas-guzzler s off the road and replaces them with more fueleconomicakl vehicles,” Legislative Affairs Vice President Davixd Regan said in a statement. Trade-in s wouldn’t be resold, but instead sent to a salvage operator tobe scrapped. How that would be enforcesd has yet tobe determined.
Regan, in an Apri question-and-answer session posted on the organization’s Web said the two key features for dealers are that voucherzs must be treated like cash from customersa to lower theamount financed, and the programk would have to include all car makers, not foreign or domestidc alone. “Dealers regardless of nameplates are he said.