Congress Considers Gas-Guzzler Trade-in Rebate

By Colin Bird  on January 16, 2009

https://www.cstatic-images.com/stock/765x765/58/-1512030016-1425510003458. The newly christened 111th Congress is barely a week old, and already there’s legislation on the table that could affect the auto universe. Both the House and Senate have proposed legislation that attempts to get old, fuel-inefficient vehicles off the road. The program, irreverently called “Cash for Clunkers,” would offer drivers of older gas-guzzlers — say, a 1999 Ford Explorer — $2,500 to $4,500 to purchase a new vehicle.

The bill is similar to other plans in Texas, California and Canada that we discussed earlier, and aims to rid the road of four million “clunkers” between now and 2012.

So where’s the catch? First off, the vehicle would have to be five years old (model year 2004 or earlier) and get an EPA-estimated 18 mpg combined or less. The vehicle must also be in drivable condition and must have been registered for at least the past 120 days. That doesn’t really sound like a clunker, does it?

That part is easy, though; the tricky part is that when you get the reimbursement slip, you have to buy a new or used vehicle that gets a fuel economy rating that exceeds the CAFE target set for its class of vehicle (car or light truck) by at least 25%.

So what does that mean? Say you turn in that 1999 Ford Explorer, which gets 16 mpg, and want to buy a comparable SUV. In order to make the voucher work, you must buy a vehicle that gets 25% better fuel economy than CAFE’s 23.1 mpg minimum requirement for a light truck. That means your new truck would need to get at least 28-29 mpg combined in order for you to be able to use the voucher.

A quick check at fueleconomy.gov reveals that only four “light trucks” — the Ford Escape Hybrid, Mercury Mariner Hybrid, Mazda Tribute Hybrid and Saturn Vue Hybrid — would qualify. The proposal didn’t say whether you could combine the voucher with available hybrid tax credits, though that would make for a pretty sweet deal.

If you opt to get a new car instead, it must get mileage that’s 25% better than 27.5 mpg. Admittedly, more cars would cross the 34-35 mpg qualifying mark, but they’re either small or they’re expensive hybrids. If you need a seven- or eight-passenger minivan or crossover, this bill can’t really help you.

Sen. Dianne Feinstein: "Cash for Clunkers"



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