What Clunker Cash Might Buy
By KEN BELSON
nytimes.com
WITH the support of President Obama, Congress is considering two plans aimed at helping automakers and dealers to lift sales, cut emissions and reduce reliance on foreign oil.
Often called “cash for clunkers,” these programs would give drivers vouchers worth as much as $5,500 if they turned in an old car or truck and replaced it with a newer, more efficient vehicle.
The proposals are modeled on programs already operating in California and Texas, as well as in Germany, Japan and a growing number of other countries.
The differences in the two Congressional proposals are still being ironed out and a compromise could be made final as early as this week. Still, a program is unlikely to be in place before fall.
Both plans assume that newer models are cleaner-running and more fuel-efficient than older cars — an assumption questioned by some critics — and that giving consumers vouchers will get them spending again on automobiles, helping automakers and dealers.
But the bills have notable differences that would affect the vehicles eligible for purchase with the vouchers.
In the bill sponsored by Representative Betty Sutton, Democrat of Ohio, car owners would receive vouchers worth up to $5,000 based on the age of the vehicle they turn in and the mileage rating of the car or truck that they buy to replace it. The replacement vehicle can cost no more than $35,000. Cars must have a federal mileage rating of 27 miles a gallon on the highway (24 m.p.g. for trucks).
Controversially, the bill states that drivers can use their vouchers only to buy new cars or trucks that have been assembled in North America, a clause that has won support of automakers with plants in the United States, Canada and Mexico.
The list of vehicles eligible for purchase under the Sutton plan includes the Dodge Journey, Saturn Vue and Toyota RAV4 crossovers and the Chevrolet Malibu, Ford Fusion, Hyundai Sonata and Nissan Altima midsize sedans.
Even sporty cars make the cut, including the Mitsubishi Eclipse and the two-seat Pontiac Solstice roadster. Large family vehicles on the Sutton list include the Chevrolet Traverse and Toyota Venza crossovers and the Honda Odyssey and Chrysler Town & Country minivans.
A second bill, sponsored by Representative Steve Israel, Democrat of New York, and nine other representatives, would give a driver up to $5,500 for an old car or truck depending on its age and assuming it had a combined city-highway rating of less than 18 m.p.g., as calculated by the Environmental Protection Agency.
The vouchers could be used to buy new or used vehicles that have a fuel economy rating at least 25 percent higher than the corporate average fuel economy standard, or CAFE, for vehicles in their class. (Vouchers are worth an additional $1,000 for vehicles that are at least 50 percent above the class CAFE standard.)
Consumers can use their vouchers only for vehicles that were built in 2004 or later and cost no more than $45,000.
Thanks to the more generous upper limit and absence of any requirement that the car be built in North America, the list of eligible cars under this plan is longer than under the Sutton plan, according to the American Council for an Energy-Efficient Economy.
The Ford Focus and Chevrolet Malibu Hybrid are on a list of eligible vehicles drawn up by the environmental advocacy group, but so is the Mini Cooper, the Hyundai Elantra and the Mazda 3.
A number of vehicles classified as trucks would be included under the Israel plan, including the Ford Escape 4-cylinder and Escape Hybrid S.U.V.’s; 4-cylinder versions of the Ford Ranger, Mazda B2300 and Toyota Tacoma pickups; and the Nissan Rogue and Subaru Forester crossovers.
Complete lists of vehicles that may be eligible for purchase under current versions of the two proposals are posted at nytimes.com/autos.
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