Clunker Recycling for Cash

Tired of seeing that gas guzzling monstrosity in your neighbor’s driveway? The news could be good to share over the back fence this morning. Congress has approved a “cash for clunkers” program today providing cash incentives from $3,500 – $4,500 for trade-in gas guzzlers when buying more fuel efficient vehicles.

The bill is H.R. 2346. The bill comes at a curious time in American spending when car production and car sales are outpaced by decreased credit resources and lowered or stalled vehicle consumer spending.  Car dealers and automakers operating with Detroit’s lessening pains nationwide want new customers on the lot.

The “clunker measure” was sponsored by Senator Debbie Stabenow of Michigan.  The cash- for-clunkers program helps reduce foreign oil dependence and improve current road conditions with better performing vehicles overall on the roads.

Cyncis wondered if amidst the cash windfalls a tide of revolving vehicles sales might emerge. Sen. Dianne Feinstein, (D-Calif.), supported more stringent voucher requirements. The United States Transportation Department, is expected to implement “Clunkers for Cash“ by early August.

The auto industry and its union lobbied heavily for passage of the cash for clunkers plan as the entire auto industry has dealt with plummeting car sales. Detroit job stagnation and Michigan population flight have reached record proportions. In May, overall sales were 34 percent lower than a year ago.

Under the proposal, 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 mpg. The value of the voucher would grow to $4,500 if the mileage of the new car was 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the car window’s sticker.

Owners of  sport utility vehicles, pickups or trucks that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV got at least 2 mpg higher than their old vehicle. If  mileage of the new car was at least 5 mpg higher than the older vehicle the voucher might increase.

Dealers get an electronic voucher per trade-in to apply to the purchase or lease of a qualifying vehicle. Dealers make sure the older vehicles are crushed or shredded to get the clunkers off the road.
The American car industry is expected to generate about $9.5 million worth of vehicles sales in 2009, compared with more than $13 million in 2008 and more than $16 million in 2007.