Cash for Clunkers continues with $2 billion
A government program that allows consumers to trade vehicles dating back to 1990 with low gas mileage - less than 18 miles per gallon - for new 22 or more miles per gallon automobiles came into effect on July 27.
Cash for Clunkers was in its first week when the program ran out of its congressionally approved $1 billion, catching thousands off guard.
Although more revenues are expected to be allocated to the program, the situation has created some additional hurtles for potential buyers since it is likely new stipulations will be tagged on with the additional money.
Federal officials believe that Cash for Clunkers can help the U.S. economy and the environment through enticing owners of older or low mileage vehicles to trade in what have for $3,500 to $4,500 credit on new qualifying cars.
The program was expected to last until November, but the massive response narrowed the time down to one week.
For the most part, credit revived from old vehicles depends on how many more miles per gallon the new car compared to the trade in and is based on factory mileage ratings for the two vehicles.
Larry Monson of Tony Basso GM in Price was interviewed before the federal program ran out of money.
Monson indicated that he thought people were aware of what was going on.
"I've had a lot of people interested," said Monson.
Many consumers locally were able to advantage of the program and both dealerships in Price were awaiting a greater response. But because the program has proven popular nationally, it is likely to be so in Carbon County.
"It's a good program because people who have older less efficient cars can come in and look at some of the newer technology," said Daniel Mower of Price Auto Group.
In order for a dealership to qualify, the company must be a registered dealer and scrap or take to older cars completely off the road.
The designated qualification criteria apply to domestic and foreign manufacturers.
"We're trying to keep the scrapping local, it must be a National Highway Traffic Safety Administration (NHTSA) approved scrap yard, and we're looking around," said Monson.
Money wise the program will last until its funding - an expected additional $2 billion in federal renewable resources revenue - is exhausted.
However, it remains unclear how long the additional money will last.
"This is probably as large a response as I've seen," said Mower. "It's been bigger than any of the factory deals because it's a chance for people to get out there and get some government money."
Much of Cash for Clunkers' design came from similar programs that have been put in pace across European countries.
Although changes have been made to the U.S. program, the idea remains the same.
When the bill was passed in the U.S. Congress on June 18, the legislation was meet with some controversy because of its increased spending as well as its potential for confusion.
But now that the program has more money, time will tell if the general public feels the benefits.
"We're hopeful that this will entice people who have been putting off a car purchase to make one a little sooner," concluded Monson.