On June 9th, the House passed the Consumer Assistance to Recycle and Save Act (the “Cash for Clunkers” bill, H.R. 2751), which was introduced by Rep. Betty Sutton (D-OH). After reports that “Cash For Clunkers” was so successful in its first week of implementation that it was running out of money, the House voted to extend the program with an additional $2 billion in funding and on August 7th, the President signed the extension into law.
In the wake of General Motors and Chrysler filing for bankruptcy, with layoffs of auto workers and the closure of car dealerships, today the House approved a "cash for clunkers" program – to bring meaningful reductions in vehicle fleet carbon emissions and fuel consumption, all while providing much-needed stimulus for our ailing automakers. Consumers may trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to help pay for new, more fuel efficient cars and trucks. This measure will spur the sales of up to 1 million more fuel efficient cars and trucks -- creating jobs and shoring up car dealerships -- and save over 250 million gallons of gas.
Passenger Cars: The old vehicle must get 18 mpg or less. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.
Light-Duty Trucks: The old vehicle must get 18 mpg or less. New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.
Large Light-Duty Trucks: New large trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.
Work Trucks: Under the agreement, consumers can trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. There will be a finite number of these vouchers, based on this vehicle class’s market share. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000 – 8,500 pounds.
