Cash For Clunkers Program Details

Yesterday the U.S. Senate passed the Cash For Clunkers program, which aims to spend one billion dollars to stabilize the U.S. car market. As Cash for Clunkers Program details are emerging, new car buyers may see $4,500 dollar government incentives for the purchase of their new cars.

Cash For Clunkers program bill number is H.R.2640. As the program states, it aims to accelerate motor fuel savings nationwide and provide incentives to registered owners of high polluting automobiles to replace such automobiles with new fuel efficient and less polluting automobiles. H.R. 26440 was referred to the Committee on Energy and Commerce on May 21 of this year. Yesterday the Senate passed the program.

Cash For Clunkers Program Details

Consumer Assistance to Recycle and Save Act - Establishes in the National Highway Traffic Safety Administration (NHTSA) a Cash for Clunkers Temporary Vehicle Trade-in Program through which the Secretary of Transportation shall: (1) authorize the issuance of an electronic voucher to offset the purchase or lease price for a new fuel efficient automobile upon the surrender of an eligible trade-in vehicle to a participating dealer; (2) certify dealers for Program participation; (3) make payments to them for vouchers they accept between March 30, 2009, and April 1, 2010; (4) provide for the payment of rebates to qualifying persons; and (5) establish and provide for the enforcement of measures to prevent and penalize fraud under the Program.

Cash For Clunkers program prescribes requirements, including combined fuel economy, for $3,500 and $4,500 vouchers to offset the purchase or lease price for a qualifying passenger automobile or truck.

H.R.2640 limits the number of vouchers to one per customer, including joint registered owners of a single eligible trade-in vehicle. The program requires a dealer to certify that each eligible trade-in vehicle: (1) will be crushed or shredded, or transferred to an entity that will ensure it will be crushed or shredded, within the period of the Program; and (2) has not been, and will not be, sold, leased, exchanged, or otherwise disposed of for use as an automobile in the United States or in any other country.

Cash For Clunkers program makes any person who purchased or leased a new fuel efficient vehicle after March 30, 2009, and before the enactment of this Act eligible for a cash rebate equivalent to the appropriate voucher amount. It prescribes standards which any regulations issued by the Secretary for the Program must meet.

H.R.2640 makes it unlawful for any person to violate this Act or any regulations issued under it, particularly by fraud. Prescribes civil penalties for any such violation. The program also directs the Secretary to make Program information available on an Internet website and through other means.

Cash for Clunkers is expected to revamp the economy and one of its most important sectors: the car industry. H.R.2640 was sponsored by Senator Debbie Stabenow, a Michigan Democrat and one of the states most affected by the turmoil in the auto industry. After the bill was passed, Stabenow said, This is an emergency for families and small businesses - for an industry that has been the backbone of our economy for a generation."

Cash For Clunkers Details in a Nutshell

This is actually how the Cash for Clunkers program will work in details in simple words. In the bill there is something for both trade-in and newly-bought cars.

The requirements for trade-in vehicle.

It has to be 18 mpg or less, built in 1984 or after and be in drivable condition. The trade-in vehicle must be registered in purchaser's name and owned for 1 year.

Cash for Clunkers program details for cars bought with the trade ins have the following requirements.

The new car has to have at least 22 mpg and cost under $45,000. There will be $3,500 subsidy for car with 4 mpg improvement and $4,500 for 5 pmg improvement.

When it comes to small light-duty trucks they have to be at least 18 mpg. They will get $3,500 subsidy for 2mpg improvement and $4,500 for 5pmg improvement. However, the large light-duty trucks will need at least 15 mpg. They will get $3,500 subsidy for 1 mpg improvement and $4,500 for 2 mpg improvement.