Congress Approves Cash For Clunkers

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Last Thursday, Congress passed the “Cash For Clunkers” Automotive Stimulus Bill, marking a big step toward recovery of the automotive industry and an expected significant increase in fuel-efficient model sales.

The one billion dollar program, formally titled “Consumer Assistance to Recycle and Save Program,” will provide vouchers, worth as much as $4,500, to consumers who replace old and inefficient “clunkers” with newer, fuel-efficient models. Vehicles purchased after July 1 will be eligible for the refund vouchers, which are administered through the National Highway Traffic Safety Administration.

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Cars must be manufactured in model year 1984 or later to be eligible for the voucher program. Photo:

To qualify for the $4,500 refund voucher, old vehicles must get 18 miles per gallon or less fuel efficiency and be replaced with a vehicle representing a 10 mpg improvement in fuel efficiency.

Vouchers of $3,500 are available for drivers who choose a vehicle with a 4 mpg improvement in fuel efficiency, as well as for SUV and truck owners who meet other improved efficiency requirements.

Automotive dealers who receive the trade-ins are responsible for sending the vehicles to a disposal facility, where they will be crushed or shredded and recycled to ensure they do not end up back on the road.

Approximately 75 percent of the average car is recyclable, made of materials including steel, plastic, lead and rubber, among others.

Local car dealers have been the biggest supporters of the Cash For Clunkers bill, seeing an opportunity to boost business and regional economies heavily dependent on car sales.

The Department of Energy estimates a consumer driving a 30 mpg vehicle will save approximately $780 a year compared to a vehicle getting 18 mpg (calculated at $2.34/gallon and 15,000 miles driven/year).

Canada enacted a similar program this year, titled Retire Your Ride, targeting the estimated 25 percent of automobiles on Canadian roads manufactured before 1995.

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