Congress Considers Cash For Clunkers Bill

This seems like a pretty good deal for all (but the taxpayer) with the government subsidizing car buying. It is certainly good for the car companies and dealers. If you listened to my radio show this past Sunday or read the chapter on car buying in my book (out this fall), you know buying new cars is toxic to your financial health under any situation.-Lou

Congress Considers Cash For Clunkers Bill

WASHINGTON (AP) - Consumers could receive rebates of up to $4,500 for turning in their gas-guzzling cars and trucks for more fuel-efficient vehicles under a House proposal.
President Barack Obama has urged Congress to approve consumer incentives for new car purchases as part of the government's efforts to reorganize General Motors Corp. and Chrysler LLC through the bankruptcy courts.

The House proposal set for a floor vote Tuesday is aimed at stimulating car sales during a bleak period for the auto industry while increasing the nation's fleet of cars that get more miles to the gallon. GM and Chrysler have received billions of dollars in government aid, but the entire auto industry has watched car sales plummet during the past year. In May, overall sales were 34 percent lower than a year ago.

The vehicle scrappage bill has been under negotiations for months as lawmakers try to find a solution that boosts car sales while providing environmental benefits. Proponents have pointed to similar programs in Europe that have enhanced auto sales.

Separately, House and

Senate appropriators were discussing providing $1 billion to a supplemental war funding bill for the "cash for clunkers" program, which aims to generate about 1 million new auto sales. Since the yearlong vehicle program is expected to cost $4 billion, lawmakers would attempt to find the additional money later this year.

Under the House bill,

car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The value of the voucher would grow to $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the window sticker.

Owners of sport utility vehicles, pickup trucks or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle. Consumers could also received vouchers for leased vehicles.

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