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(Washington D.C.)- {The House of Representatives passed legislation today which included $1 billion to provide consumers with an incentive to recycle their older vehicles and replace them with new, cleaner, and more fuel efficient models. The Fleet Modernization provisions were included in a Supplemental Appropriations bill for funding ongoing military operations in Iraq and Afghanistan, pandemic flu response, and other needs. The House approved the bill on a vote of 226 to 202.
The House-passed bill includes the authorization for the Fleet Modernization program, which the House previously approved last week, as well as $1 billion to fund the new program. The Senate is expected to take up the Supplemental funding bill later this week and send it to the President, who has indicated his support.
“The domestic automakers are getting back on their feet and this legislation will be a shot in the arm -- sales,” said Rep Levin. “Sales are at historic lows because of the recession and global financial crisis and these vouchers will help families, car companies and dealerships, as well as update the cars on the road.”
Program Details
The legislation establishes the ‘CARS’ Program at the Department of Transportation, which would be required to circulate implementing regulations within 30 days. The program will run for one year following implementation and is authorized for $4 billion which will provide for the purchase of approximately one million new vehicles.
Older Trade-In Vehicles:
• Must be in drivable condition;
• Have been continuously insured to the same owner for at least one year immediately prior to trade-in;
• Manufactured in model year 1984 or later; and
• Have a combined fuel economy of 18 mpg or less.
New Vehicles (divided in to 4 categories) - The mpg values are EPA combined city/highway fuel economy as posted on the window sticker of the new vehicle.
• Passenger Cars: New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.
• Light-Duty Trucks: New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.
• Large Light-Duty Trucks: New large trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.
• Work Trucks: Consumers can trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. Vouchers are limited to 7.5 percent of total funds. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000 – 8,500 pounds.
• Consumers must trade-in a vehicle with a maximum combined city/highway fuel economy of 18 mpg or less to be eligible for vehicle purchase vouchers. Work trucks must be traded in for work trucks.
• Vehicle lease terms must be for minimum of five years.
• Eligible new vehicles must have a MSRP of $45,000 or less.
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