Washington, D.C. -U.S. Reps. Joe Donnelly (D-South Bend) and Fred Upton (R-St. Joseph) have co-sponsored bipartisan “cash for clunkers” legislation to take older, less fuel efficient cars off the road and stimulate new car sales. The bipartisan Consumer Assistance to Recycle and Save (CARS) Act, H.R. 1550, will provide consumers a $3,000 to $5,000 incentive to turn in vehicles that are eight years or older and purchase more fuel-efficient vehicles or to obtain a transit voucher. President Obama voiced support for the program to boost the auto industry on Monday.
“Not only will this legislation provide a much-needed boost to our auto industry, but it will also help us achieve energy independence while creating local jobs,” Donnelly said. “In this tough economic climate, it is essential that we provide every incentive to help folks buy cars and put people back to work. I look forward to working with my colleagues in Congress to get this bill passed.”
“The first step on the road to recovery is to get Americans back in the showroom buying cars again, and this bill will do just that,” said Upton. “I am heartened with the Administration’s recognition that we must address consumer incentives to boost the auto industry as car sales have plummeted across the globe. Cash for clunkers will immediately boost flagging auto sales, stimulate the economy and put folks back to work, not to mention we’ll dramatically reduce emissions and our dependence on Mideast oil with more fuel efficient vehicles on the road.”
The CARS Act is modeled after Germany’s scrap program which led to a 21% surge in auto sales in February 2009, compared to a 22% decline in the United Kingdom for the same period. Similar programs have now been implemented in 12 European countries and have helped drive up auto sales across the continent.
In the legislation, new car purchases that qualify for this incentive must achieve a minimum of 27 miles per gallon on highways, while new trucks must achieve a minimum of 24 mpg for highway driving. The bill provides graduated incentives based on greater fuel efficiency. The legislation also offers transit vouchers in exchange for older, high emission vehicles.
The CARS Act provides consumers with a voucher to trade in older vehicles in exchange for newer, more fuel efficient models that are built in the United States and North America. The amount of the voucher ($3000 to $5000) depends on the new vehicle's fuel efficiency and where it is assembled. Vehicles built in the U.S. receive a slightly higher voucher than those assembled in other parts of North America - this also includes foreign transplants that build cars here in addition to Ford, Chrysler and General Motors. The bill also provides a $7,500 voucher toward the purchase of a new plug-in hybrid electric vehicle assembled in the U.S. from 2011 to 2016.
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