WASHINGTON, D.C. — Congress is again considering a so-called “Cash-for-Clunkers” bill that would offer assistance in buying new, more fuel efficient vehicles. HB 1550, the Consumer Assistance to Recycle and Save (CARS) Act, was introduced by Rep. Betty Sutton (D-OH).
The CARS Act would provide $3,000 to $7,500 vouchers to owners of vehicles that are at least eight years old to purchase more fuel-efficient vehicles. The vouchers are based on miles-per-gallon, and vary depending on where they were built.
To promote American cars built domestically, cars built in the U.S. must get at least 27 mpg on the highway, while those built in Canada or Mexico must get at least 30 mpg to qualify for the program.
The Automotive Service Association (ASA) has weighed in on the proposed legislation, and said it supports the program if it includes a vehicle repair option for consumers, state administration of the program, participation tied to vehicle emissions and repair allowances that would address emissions-related repairs.
The Automotive Aftermarket Industry Association (AAIA) on the other hand, believes the bill could actually do much more harm than good to the environment if the bill is passed, and says the scrapped vehicles will more than likely be sent to landfills, creating more pollution, not less.
New Automobile Voucher Program Introduced in Congress $5,000 Voucher for New Vehicle Purchases
In related news, U.S. Reps. Donald Manzullo (R-Ill.), and Timothy Ryan (D-Ohio), have introduced a separate vehicle voucher program called the New Automobile Voucher Program to Congress to provide a one-time boost to vehicle sales in 2009.
The New Automobile Voucher Act of 2009 provides an electronic voucher of $5,000 for any new vehicle purchase for a six-month introductory period. The Treasury Department is required to open this program 30 days after the bill’s enactment.
After the initial six months, the voucher would be reduced to $2,500 until the end of 2010 or until the authorization amount is exhausted (whichever comes first). This voucher can be used in conjunction with other tax incentives, including the recently restored tax deduction for state and local sales tax paid on the purchase of a new vehicle and those credits designed to encourage the purchase of alternative-fueled vehicles. This voucher would be limited to vehicles that cost under $50,000.
The Treasury Department would establish an electronic portal with automobile dealerships to process and verify requests for vouchers. Consumers would have the voucher applied at the point of sale at the automobile dealership.
Total cost of the bill is capped at $75 billion.
