House Passes 'Cash for Clunkers' Bill

Washingtonm DC June 10, 2009; The AIADA newsletter reported that the House passed a plan to boost auto sales by providing vouchers of up to $4,500 for consumers who turn in their gas-guzzling cars and trucks for more fuel-efficient vehicles.

The Wall Street Journal reports that the House bill, which passed by 298 votes to 119, is aimed at stimulating car sales during a bleak period for the auto industry and increasing the nation's fleet of cars that get more miles to the gallon.

President Barack Obama has urged Congress to approve consumer incentives for new car purchases as part of the government's efforts to reorganize General Motors and Chrysler through the bankruptcy courts. Analysts said the bill, which has not yet been considered by the Senate, would encourage car shoppers.

The U.S. industry is expected to generate about 9.5 million vehicles sales in 2009, compared to more than 13 million in 2008 and more than 16 million in 2007. The bill would direct dealers to ensure that the older vehicles are crushed or shredded to get the clunkers off the road—built in model year 1984 or later—and would not make financial sense for consumers owning an older car with a trade-in value greater than $3,500 or $4,500.

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