Late yesterday the House of Representatives approved a bill that would offer consumers up to $4,500 to trade in their vehicle on a more fuel-efficient machine. The legislation must now go before the Senate before President Barack Obama is expected to give it final approval.
The bill passed with a strong majority of 298 to 119 and has also received the support of U.S. automakers.
Still, the CARS Act as it is being called is significantly different from the successful incentive programs used in Europe as its aim is not to sell cars, but to sell fuel efficient cars.
Vehicles that are traded in must get 18 mpg or worse. For those who trade in their guzzler for a vehicle that gets (on average) 4 mpg more will receive a $3,500 voucher toward the new car, while those who choose a vehicle that gets 10 mpg more than their current auto will receive the full $4,500.
Programs in Europe, like the incredibly successful one in Germany, target older cars, rather than gas guzzlers.
The CARS act is a temporary measure and is being funded through a $4 billion fund. It is also not retroactive.
If passed in the Senate and approved by President Obama, it is likely to go into effect 30 days afterward, which may mean consumers won’t be able to cash in on incentives until August 1st – a full six months after programs like the one in Germany were put into effect.