‘Clunker’ bill is a good bet  for Midwest

Updated 9:47 PM Friday, June 19, 2009

There are a lot of reasons for Midwesterners — still tied to the auto industry, despite everything — to like an idea proposed by Akron-area Democratic Congresswoman Betty Sutton (and supported by local Republican Rep. Steve Austria).

Her idea is to use $4 billion in Energy Department stimulus funds to spur auto sales while helping to reduce emissions and increase fuel efficiency in the nation’s auto fleet.

The proposal, known as “Cash for Clunkers,” would offer up to $4,500 to car owners who agree to trade in their old, gas-guzzling vehicles for new cars with better gas mileage.

The plan still needs work. That’s coming now that it has passed the House and is headed to the Senate.

But it’s promising, both as a stimulus and for its environmental benefits.

In Europe, where versions of “cash for clunkers” are already in play, the results have been promising. Car sales have jumped significantly.

The Wall Street Journal reports Germany saw a 20 percent gain in auto sales in February alone, and there is evidence car owners truly did swap primarily for compact, fuel-efficient vehicles.

Would the impact be as great here? It’s hard to say.

Germany has more incentives for drivers to be fuel-sensitive. A high gas tax makes the per-gallon cost of gasoline well above U.S. prices.

And the Germans tax big cars heavily. The bill the U.S. House passed may not provide incentive enough for drivers to buy better cars. In that version, the vouchers can only be used for new cars, not used cars.

And owners would have to just turn over their old cars for no trade-in value. (Remember, they’re being scrapped).

The old cars have to be operable and have been insured for the past year. So they can’t really be true junkers.

At the same time, it wouldn’t make economic sense for an individual to turn over a car worth more than $4,500. You’d be better off selling it or doing a traditional trade-in.

Also, if you’re buying a new car, you can probably expect to pay at least $12,000. That could be a tall order for many folks worrying about their jobs in an economic downturn.

Meanwhile, environmental groups aren’t sure the bill, as it stands now, serves the planet well enough to justify its cost.

For instance, the sliding scale in the law would allow a car owner to get $3,500 for trading up from a vehicle getting 18 miles to the gallon to one that gets 22 miles to the gallon.

Environmentalists say that’s not enough payoff. They’d like to require the new car be even more fuel-efficient.

The opportunity is there for fixes to be made. If senators put some work into refining it, “cash for clunkers” could be good for the environment, could reduce demand for oil and could spur car sales.

All of those outcomes would be good for Ohioans.

Despite the dramatic downsizing of General Motors and Delphi, Ohio still has a lot of jobs tied to the auto industry directly and indirectly.

The state needs the industry to prosper and hopefully even start growing eventually.

Given that the stimulus funds are to be spent one way or another, this is a well-conceived way.

— Cox News Service

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Starting July 24 2009 consumers who would like to purchase a new car trading off their old gas guzzlers can use
the Cash For Clunkers program voucher.

Jhenry
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www.cashforclunkersfacts.info
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jhenry
2:08 AM, 7/16/2009

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The "cash for clunkers" bill is stupid. You only get the money if the car is junked rather than traded in. That means you get $0 trade-in value for the car, which means the dealer will have to raise the price to make more money off of you since he won't get to make $1-2,000 off your trade-in. Also, it only applies to vehicles with a sticker combined MPG of 18 or less. My car gets less than that, but the sticker says combined MPG 22. Stupid stupid stupid

bob
10:24 PM, 6/20/2009

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