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Congress Passes Cash for Clunkers

A bill passed June 18th, 2009 by the Senate will establish a national program to encourage car owners to voluntarily trade in their older, less fuel efficient car, truck or SUV for more fuel efficient vehicles.

The Consumer Assistance to Recycle and Save Act (CARS) H.R. 2751, also commonly known as Cash for Clunkers (CFC), passed the House last week and was allocated $1 billion for this fiscal year. The program is estimated to result in the purchase of approximately 300,000 new cars and trucks in the US.

CFC was initially designed by three organizations: Center for American Progress (CAP), ACEEE and Smarttransportation.org. (www.smarttransportation.org) We applaud Congress for approving the Cash For Clunkers program. We will strive for even more efficiency gains on reauthorization of this program, but this is a start, said Jack D. Hidary, Chairman of Smarttransportation.org (www.smarttransportation.org).

The measure was first introduced in the Senate by Senators Feinstein (D-Calif.), Collins (R-Maine), and Schumer (D-NY) and in the House by Steve Israel (D-NY2) and Jay Inslee (D-WA1). The initial bills contained greater efficiency gains and options for converting the trade-in voucher to public transport rides.

President Obama endorsed the program in his speech of March 30, 2009 and indicated he will sign the bill into law.

The CFC program requires that vehicles be turned in have a combined city and highway rating of no more than 18 miles per gallon and be in drivable condition. Consumers will receive a $3,500 subsidy to be used for the purchase of a new car, if the new vehicle is at least four miles per gallon greater than the old vehicle. Consumers will obtain a $4500 subsidy if the increase in efficiency is at least 10 miles per gallon in comparison to the older car.

Cash for Clunkers programs have proven extremely successful internationally. In January 2009, Germany passed a comparable program. Car sales in Germany, nationwide, went up 20% in February, in comparison to February 2008, and 40% in March, in comparison to last year. Italy, France and other countries have also recently passed Cash for Clunkers programs.

In January of this year the environmental protection bureau of Beijing devised a program to pay citizens up to $3600 to give up their heavily polluting vehicles. The program'ss goal is to take approximately 10 percent of the city'ss 3.5 million registered cars off the roads.

For more information on the program please visit www.smarttransportation.org or email info @ smarttransportation.org

Contact:

Hallie Fishman (Hallie @ jhidary.com)

or Morris Laniado (morris @ jhidary.com)

(212) 365-6945

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