U.S. House Passes Cash for Clunkers Plan
By Michelle Krebs June 9, 2009WASHINGTON - The U.S. House has approved the "cash for clunkers" bill, aimed at boosting slumping car sales and replace old vehicles on the roads with more cleaner, more fuel-efficient ones.
The House bill, approved with a vote of 298 to 119, allows consumers to turn in their vehicles for vouchers worth up to $4,500 voucher toward more fuel-efficient ones.
Nevertheless, as the House bill is constructed trying to address the environment as well as sales, it's impact will be less than it could be, according to an analysis by Edmunds.com.
"A program intended to stimulate car sales should target people in the market for a car, but this program does not," said Edmunds.com CEO Jeremy Anwyl. "The only people who qualify are those willing to take no more than $4,500 for their current car and immediately buy a new one - quite a narrow profile."
Added Karl Brauer, Edmunds.com Editor In Chief: "It's a very poorly conceived piece of legislation that will neither significantly reduce our country's carbon footprint nor do anything to substantially spur new car sales."
Brauer, who addresses this topic on his blog, Karl on Cars, continues: "The only thing more ineffective than this bill is the government's response to sagging car sales - which are really taking their toll on the overall economy."
LEAVE A COMMENT
Is this from the same government that owns the majority of GM?
Maybe the government should lay off. Car sales have been way above normal for about ten years. Back in 2006 when credit was easy to get and the D3 had ridiculous employee pricing promotions cars were flying off the shelves. Look where that left us.
The German plan worked well, but only because the trade in allowance was closer to the real value of the vehicle. This won't spur anything close to the expected bump in car sales, and it's likely that dealers won't give the maximum allowance on anything short of a car worth lots more than $4,500.
ADD A COMMENT