Even though the federal Car Allowance Rebate System — or “Cash for Clunkers” — is still in its infancy, Dave McCurdy, president of the Alliance of Automobile Manufacturers, expects the program to be extended in the fall.
The Obama administration allotted $1 billion for the program, which is estimated to cover approximately 250,000 trade-ins. Still, McCurdy says that may not be enough to cover the demand for the program.
“I think it’ll go very quickly, and Congress may have to revisit it in the fall,” McCurdy told Automotive News. “We think there’ll be additional phases of this. It’ll probably evolve.”
Currently, the government is working out the final details of the CARS program. This however, did not stop a Hyundai dealership from using the program already. The program will technically start July 24, following the 30-day period granted to iron out CARS’ technicalities.
Under the current program, buyers qualify for rebates of up to $4500 depending on the fuel economy gains the car bought has over the car traded in. A truck buyer qualifies for a $3500 credit if the new truck bought has a combined fuel economy rating at least 2 mpg higher than the truck traded in. New car buyers must yield at least a 4 mpg improvement to qualify for a $3500 credit. With an even bigger jump, the credit can increase to $4500.
The discrepancy between cars and trucks caused some to predict the program will be used mainly for purchases of new pickup trucks. McCurdy warns against this, as he says Congress won’t extend the program “if it’s just a truck program for people buying F-150 pickups.”
Source: Automotive News