June 16 (Bloomberg) -- U.S. consumers may be able to collect as much as $4,500 by September on vehicle trade-ins under “cash-for-clunkers” legislation up for a vote in the House today.
Would you trade-in your car or truck if the federal government paid you up to $4,500 to buy a new vehicle with better fuel economy? Backers of the “cash for clunkers” bill that passed in the House late Tuesday said that more than one million vehicle owners would.
The bill, sponsored by Representative Betty Sutton, Democrat of Ohio, encourages owners of cars or light-duty trucks that get less than 18 miles a gallon to turn them in for new cars. If they buy a car with a window sticker mileage rating of at least four miles a gallon more than their old car, they will receive a voucher worth $3,500. People buying a new car with a 10 m.p.g. improvement will get a voucher for $4,500.
The program will cost an estimated $4 billion, and the bill needs to be approved in the Senate, where there is a competing bill, led by Senator Diane Feinstein, Democrat of California.
In addition to having stricter fuel economy requirements, the Senate bill contains three major differences. The first is the maximum fuel economy of the trade-in vehicles, which is 17 miles a gallon. The second is there are three voucher amounts ($2,500 to buy a new car that gets at least seven miles a gallon more, $3,500 for 10 m.p.g. more and $4,500 for 13 m.p.g. more). Finally, the Senate bill also offers a provision for buying a used car.
Obviously, automakers are thrilled about any proposal that will nudge customers into dealerships.
“This timely, targeted and temporary program will put money directly in the hands of consumers and work to reduce fuel consumption and greenhouse-gas emissions,” Pete Lawson, Ford’s vice president for government affairs, said in a statement via Bloomberg.
John Krafcik, chief executive of Hyundai Motor America, was more forthcoming about the automaker’s interests.
”Eleven percent of American car buyers are putting themselves on the sidelines and saying ‘You know, I’m going to wait to buy a car to see if this bill might come, because it’s an extra $3,500 or $4,500,’”he told CNBC. “That’s about a 100,000 sales a month we’re missing right now, so we really hope Congress gets this thing moving, because that could really stimulate the industry.”A look at proposals in Congress to provide consumers with rebates of up to $4,500 to turn in their gas-guzzling cars and trucks for more fuel-efficient vehicles.
HOUSE
Lawmakers on Tuesday passed the House bill sponsored by Rep. Betty Sutton, D-Ohio. Its provisions:
_Passenger car owners could receive a voucher worth $3,500 if they traded in a passenger car getting 18 miles per gallon or less for a new car getting at least 22 mpg.
_Sport utility vehicle, pickup truck or minivan owners that get 18 mpg or less could receive a voucher for $3,500 if their new SUV, truck or minivan is at least 2 mpg higher than their old vehicle.
_Passenger car owners could get a voucher for $4,500 if they traded in a passenger car getting 18 miles per gallon or less for a new car that is 10 mpg higher than the old car.
_SUV, pickup truck or minivan owners that get 18 mpg or less could receive a voucher for $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle.
_Large trucks (pickup trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg would be eligible for vouchers of $3,500 to $4,500.
_Consumers can receive electronic government vouchers through participating dealers for the purchase or lease of qualifying vehicles.
_Older trade-in vehicles must be in drivable condition, be manufactured in model year 1984 or later and be continuously insured to the same owner for at least one year immediately prior to trade-in.
SENATE
A group of senators led by Sen. Dianne Feinstein, D-Calif., have proposed an alternative to the House version. Its provisions:
_The trade-in passenger car must get 17 mpg or less and the new passenger car must get at least 24 mpg to be eligible for vouchers.
_Passenger car owners could receive a voucher worth $2,500 if they traded in a passenger car getting at least 7 mpg more than the old car. The voucher would grow to $3,500 if they traded in a passenger car getting at least 10 mpg more than the old car. And it would grow to $4,500 if they traded in a passenger car getting at least 13 mpg more than the old car.
_The purchase of a used passenger car with a mileage of at least 24 mpg would qualify for a voucher of $1,000.
_The trade-in sport utility vehicle, pickup truck or minivan must get 17 mpg or less and the new vehicle must get at least 20 mpg to be eligible for a voucher.
_SUV, pickup truck or minivan owners could get a voucher for $2,500 if they traded in their vehicle for a new SUV, pickup truck or minivan getting at least 3 mpg more than the old vehicle. The voucher would increase to $3,500 if they traded in their vehicle for a new SUV, pickup truck or minivan getting at least 6 mpg more than the old vehicle.
_SUV, pickup truck or minivan owners could a voucher for $4,500 if they traded in their vehicle for a new SUV, pickup truck or minivan getting at least 9 mpg more than their old vehicle.
_The purchase of a used SUV, pickup truck or minivan with a mileage of at least 20 mpg would qualify for a voucher of $1,000.
_Large trucks (pickup trucks and vans weighing between 6,000 and 8,500 pounds) with a mileage of at least 17 mpg would be eligible for vouchers ranging from $2,500 to $4,500.
Sens. Debbie Stabenow, D-Mich., and Sam Brownback, R-Kan., have sponsored legislation in the Senate that has similar requirements as Sutton's bill in the House.
