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After passing through both the Senate and the House, the Cash-for-Guzzlers bill has been signed by President Obama. Known also as Cash-for-Clunkers, the official name of the legislation is CARS – the Car Allowance Rebate System.
Vehicles that are traded in must get 18 mpg or worse and be newer than 25 years old. 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.
The rules are slightly different for trucks as the full $4,500 voucher will be available for gas guzzling trucks when traded in on a new truck that gets 5 mpg more.
The hope is that this new legislation will boost auto sales. Similar initiatives (but which target old cars and not gas guzzling ones) have been a huge success in countries like German.
The CARS act will take effect at the end of July.
Those looking for more info can visit the CARS website here:
New legislation aimed at improving sales of fuel-efficient cars
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.