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January 16th, 2009

Will “Cash for Clunkers” Work?

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Lawmakers are considering a bill introduced by several U.S. Senators aimed at reducing our oil dependency and green house gas emissions. The bill known dually as the “Cash for Clunkers” and the “Vehicle Scrappage” Bill, provides consumers with a cash voucher when they trade in their fuel-inefficent vehicle, or clunker.

While environmental groups like the American Council for an Energy-Efficient Economy (ACEEE) are praising the initiative, another group of Americans are staunchly opposed. Vintage automobile collectors are up in arms that this bill could spell the end for the classic, yet gas-guzzling, cars they love and restore. While the bill isn’t specifically aimed at removing vintage vehicles from the road, they certainly aren’t exempt.

With the inauguration of a new Congress just around the corner, this bill will get a fresh set of eyes for consideration:

“This bill will help address that [fuel efficiency] problem. It will create a voucher program to reimburse drivers who trade in their old cars, trucks and SUVs with a coupon of $2,500 to $4,500, depending on the fuel efficiency of the purchased car. If enacted, this bill would be an important part of helping getting America’s struggling automobile industry back on its feet – and help consumers who are concerned about covering the cost of buying a more fuel efficient vehicle. I’d like to thank my colleague Senator Salazar for his leadership in helping to craft some of the bill’s key concepts,” Senator Feinstein added.

In my opinion this is the ultimate win/win for buyers, dealers, and the auto makers,” wrote CNBC’s Phil LeBeau.

READERS: In your opinion, is this program a win/win, or a waste of time?


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3 Responses to “Will “Cash for Clunkers” Work?”

  1. forex software Says: January 16th, 2009 at 8:58 am

    IMHO this is a wasting of time

  2. karenc Says: June 6th, 2009 at 7:28 pm

    This bill would put every charity car donation program in the nation out of business since the amount of the voucher would be much greater than the tax deduction. The solution is to simply allow the charity to issue the voucher in lieu of the tax deduction. The charity would then junk the car in accordance with the bill. This way, everyone wins, the car dealer, car maker, car buyer and the charity.

  3. Tim Manni Says: June 8th, 2009 at 12:06 pm

    Karen C,

    Has the solution to “allow the charity to issue the voucher in lieu of the tax deduction” been implemented yet? Was that a Federal decision? You make a great point about charities suffering from this program, so I would like to find out if this solution is for real.

    Thanks for commenting,
    Tim

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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