This is obviously to jump start the ailing auto industry, urge consumers to go greener by saving energy and the environment. Car owners could get a $3500 trade-in voucher for cashing in an under 18 miles per gallon car for one that gets at least 22 or more m.p.g., or receive a $4,500 voucher if the new car gets 10 m.p.g. higher than the original trade-in vehicle. Trucks, minivans, and SUV’s owners will get a $3,500 voucher for trading in a similar new vehicle that gets just 2 m.p.g. more; and the voucher increases to $4,500 if the new vehicle gets 5 m.p.g. or higher than the original vehicle.
A spokesman for GM has estimated that the new legislation would help increase new-car sales by just 10 percent, compared to Germany’s similar program that produced a 39-percent increase in new-car buying. This is because the consumers who want to take advantage of the vouchers will still have to have the cash or be able to get a loan to upgrade to a new car. So the ‘cash’ portion in the ‘Cash For Clunkers’ will be missing, as most will not be able to afford a new car.
If your car’s trade-in value is higher than $3,500 or even $4,500, you will be better off not using the voucher, although some car dealers just might find ways to maximize your trade-in, so they can use the program.
The bill is unfair for those who are in the used car industry, also unfair to the mechanics who fix the clunkers, as well as the auto after-market parts industry. Each and every one of these tax payers will contribute by paying their taxes that feeds the program.
For people who do not have the money or are unable to get a loan, this government voucher will be useless as they can’t get a new car anyways.
The Cash for Clunkers program seems to be a tax cut benefit suitable for the wealthy, or for those who are better off than most.