Key in the ignition for 'Clunkers'

Touted for triple benefits, program starts in weeks

By Jeff Gelles
The Philadelphia Inquirer

E-Mail

Comments (0)

Text Size:

tool goes here

"Cash for Clunkers" won't single-handedly save the environment, rescue the beleaguered auto industry or spare consumers from financial distress.

But the $1 billion federal program promises a little help in all three areas, a bit of political symbiosis that explains why the plan motored through Congress three weeks ago on the back of an Iraq war-funding bill.

Once it gets rolling later this month, the program will offer incentives of $3,500 or $4,500 to those who buy or lease a more energy-efficient new vehicle. The goal is to get people to trade in a qualifying gas-guzzler — car, SUV or light truck — for a comparable vehicle that gets substantially more miles per gallon.

AT A GLANCE
- The program will offer incentives of $3,500 or $4,500 to those who buy or lease a more energy-efficient new vehicle.
- Lawmakers are hopeful that it will make a small dent in energy use and pollution, as well as jump-start auto sales.
- Although the rebates theoretically became available Wednesday, they are unlikely to spur sales until final procedures are announced, probably around July 24.
- The program expires Nov. 1 — or whenever the money runs out.

The program's narrow focus has drawn criticism. Still, lawmakers are hopeful it will make a dent in energy use and pollution and jump-start car sales. Without it, automakers are on pace to sell just 10 million new vehicles in the United States this year,down dramatically from 16 million in 2007 and 13 million in 2008, according to Edmunds.com, which compiles data on the industry.

Although the rebates theoretically became available Wednesday, they are unlikely to spur sales until final procedures are announced, probably about July 24. Until then, car dealers could be on the hook if they credit buyers with incentives and are unable to collect from the government.

At the other end, the program expires Nov. 1 — or whenever the money runs out. Given that its backers initially proposed spending $4 billion to promote the purchase of a million vehicles, and that a similar program boosted Germany's car sales 40 percent in May, the spigot could run dry before November.

Of course, Congress might relent and extend the program. Meanwhile, the funding cap may help by pushing fence-sitters to act.

Some dealers say the program has captured buyers' attention and may even be dampening sales as shoppers await the help.

"We're having customers come in and ask about it every day, or say that they're waiting for it every day," said Ross Choate, managing partner for the John Kennedy Ford, Mazda, and Subaru dealerships in Philadelphia's suburbs.

To be eligible for the incentive, a buyer must bring in an operable car that is less than 25 years old and that gets a combined EPA city-highway average of 18 miles per gallon or less. The buyer must have owned and insured the car for the past year. You cannot buy a clunker just to make the trade.

The car must be suitable for scrapping, If it is valued at more than $4,500, it may be worth more as an ordinary trade-in, since any car turned in under the program must be junked.

Kelley Blue Book has a online calculator at www.kbb.com/kbb/cash-for-clunkers.

To get any incentive, you must buy a new vehicle that averages at least 22 mpg and at least 4 mpg more than the clunker. To get the larger $4,500 incentive, the new car must beat the old one by 10 mpg. To check mileage, go to www.fueleconomy.gov.

The new vehicle's manufacturer-suggested retail price cannot exceed $45,000.

SUVs and minivans can be junked, too, and you may be able to use the incentive for a new one. New SUVs and other vehicles classified as "light-duty trucks" under the law are eligible if they get at least 18 mpg.

For the $3,500 incentive, the new light truck must get at least 2 mpg more than the old one. For $4,500, it must get at least 5 mpg more.

Certain trucks of up to 5 tons may qualify.

For more information on eligibility and answers to other questions, go to www.cars.gov.

House backers estimate average gas savings per vehicle of 250 gallons a year, which is plausible if you consider that a car averaging 15 mpg needs 1,000 gallons of gas to travel 15,000 miles a year, compared with 600 gallons for a car that gets 25 mpg.

At that rate, replacing 250,000 gas-guzzlers should yield an annual savings of 62 million gallons, assuming drivers will not drive more in more efficient vehicles, a premise some critics contest.

But if it is a step in the right direction, it is a small one. According to the Energy Information Administration, U.S. motorists consume 390 million gallons of gasoline each day.