Congress nears agreement on ‘Cash for Clunkers’ program

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It appears Congress is close to reaching final terms on a ‘Cash for Clunkers’ program, a stimulus effort that would give consumers up to $4,500 to purchase a new car. The catch? You have to trade in your old car. And your old car has to get terrible gas mileage.

On Tuesday, the House Committee on Energy and Commerce released a fact sheet outlining the terms of the plan. According to the document, passenger cars being traded in (i.e. the ‘clunker’), must get a combined EPA rating of less than 18 mpg. In order to be eligible for vouchers, new cars must get at least 22 mpg. Mileage improvements of at least 4 mpg will net consumers $3,500, while improvements of 10 mpg or higher pay the maximum of $4,500.

If you’re in the pickup truck or SUV market, life’s a little easier. Minimum fuel economy for new vehicles is pegged at 18 mpg, and mileage needs to improve only by 2 mpg to qualify for a $3,500 voucher; $4,500 vouchers come with improvements of 5 mpg. Requirements for large light-duty trucks (6,000 to 8,500 pounds) and work trucks (8,500 to 10,000 pounds) are even less stringent.

Similar programs have met with mixed success in Europe. German market auto sales are actually up, thanks to a plan in which consumers are entitled to incentives of about $3,000. Italy is offering up to $6,500 to participants that qualify, and Great Britain will write residents a check for about $2,900. Still, auto sales in the United Kingdom were down around 30% in March.

There’s only a limited time to act on the U.S. program — it will run for only one year if passed by Congress,

Check out a comprehensive chart at DriverSide.

—Brian Alexander

Brian Alexander is a staff writer for Driverside.com