The car industry and auto makers are strong behind a new clunker bill, but is there any real benefit?
It’s safe to say that news for the U.S. automotive industry has not been positive lately. A “cash for clunkers” bill navigated its way through Congress, though, and the car industry couldn’t be happier.
Bottom-line, the clunker bill allows you up to $4,500 in discounts (thanks to the U.S. government…actually, thanks to the taxpayers) if you trade in your old car for a new, greener vehicle.
With most of the hoopla over-and-done with, and with President Obama’s signature on the Cash for Clunkers bill, a whirlwind of criticism and second-guessing has commenced. The car industry and auto makers are largely pleased with the bill and its stipulations, but that seems about it.
After the cash for clunkers plan was signed into law and in advance of the program’s commencement, a New York Times article pointed out that the stringent rules for the program might lead to its eventual downfall. In fact, the Baltimore Sun points out, the cash for clunkers bill only applies to cars purchased after July 1, 2009, but government officials can tweak the rules up until July 24. That leaves more than a month of unsure consumers and a confused car industry that doesn’t quite understand the rules, either.
In fact, most current media coverage of the cash for clunkers bill usually mention that the stipulations of the bill that result in the highest discount seem to encourage further purchase and use of SUVs – some of the least efficient vehicles on the road
Cash for clunkers (not so) fine print for your trade-in car
So, while auto makers urge you to sell your car (before you rush over to us at Big Bucks Auto), there are a few qualifications your trade-in has to meet in order to take qualify for the Cash For Clunkers plan:
- Your trade-in vehicle must operate at 18 miles-per-gallon or less; be built in 1984 or after; and in drivable condition.
- The trade-in has to be registered in the purchaser’s name and owned for at least one year.
What you buy determines what you get
And the Cash For Clunkers credit you receive for that trade-in can’t just be any ol’ car on the lot. With the blessing of the automotive industry and struggling car makers everywhere, your new car has to be greener:
- Cars need run at least 22 mpg and cost less than $45,000. For a car with a 4 mpg improvement from your old clunker, you get a $3,500 subsidy from the government. Cars with a 10 mpg improvement will get you a $4,500 subsidy.
- Small, light-duty trucks must run at least 18 mpg, with a $3,500 discount for a 2 mpg improvement in gas mileage and the full $4,500 for a 5 mpg improvement.
- Large, light-duty trucks must get at least 15 mpg with $3,500 for those with a 1 mpg improvement from your old car and a $4,500 subsidy for 2 mpg improvement.
Good news for the auto industry, but what about the rest of us
Then, we get to the part only slightly covered in automotive industry news that we feel should be revisited before the rules are finalized: Where do the old cars go?
Well, under this Cash For Clunkers plan, the government would take these cars and scrap them, thereby eliminating the economic benefit of reselling those cars in the private sector. In other words, all of those cars traded in would not be placed into the used-car market, they would hit the scrap yard. Is this good for the environment? Probably. Good for the economy? It might be, but it would have more impact if those cars could re-enter the market and be sold. With the current proposed plan, the car industry would get an economic boost, but that’s the extent of it.
As far as the Cash For Clunkers bill acting as a way to get older, less efficient vehicles off the road – that would be true only for the few who actually qualify under the bill.
As far as we’re concerned at Big Bucks Auto, the Cash for Clunkers plan is too little, too late.
Stay tuned to find out how the cash for clunkers bill and the car industry turns out
Clearly, grumbling about the cash for clunkers bill is growing. The car industry, though, will likely need more of a boost than this bill to provide auto makers with enough steam to turn green for good.
Whether the Cash For Clunkers bill ends up making a difference or not, you can always learn more about how to sell your car in NYC with Big Bucks Auto™. After all, you’ll get a better deal from Big Bucks Auto than Uncle Sam any day.
Learn more about why choose us to buy your car and call us today at 1-888-44-BUCKS or 1-888-442-8257
