[Toshi]

crossposted from alt.personal-trans for those who don't follow that thread.

the house is considering cash for clunkers, again. this time waxman and other house bigwigs have come to an agreement that will, in theory, let a version of this proposal be passed later on during this session of congress. (ie, nothing has passed the house, let alone the senate and barack obama's bill-signing desk, not to mention the inevitable delay prior to actual implementation.)

http://energycommerce.house.gov/Press_111/20090505/cashforclunkers.pdf + much more hand-wavy coverage in the popular media.

May 5, 2009
Fact Sheet: Cash for Clunkers
Committee on Energy and Commerce

Consumers may trade in their old, gas-guzzling vehicles and receive vouchers worth up to $4,500 to help pay for new, more fuel efficient cars and trucks. The program will be authorized for up to one year and provide for approximately one million new car or truck purchases. The agreement divides these new cars and trucks into four categories. Miles per gallon figures below refer to EPA “window sticker” values

• Passenger Cars: The old vehicle must get less than 18 mpg. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.

• Light-Duty Trucks: The old vehicle must get less than 18 mpg. New light trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old truck, the voucher will be worth $4,500.

• Large Light-Duty Trucks: New large trucks (pick-up trucks and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.

• Work Trucks: Under the agreement, consumers can trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. There will be a finite number of these vouchers, based on this vehicle class’s market share. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a smaller light-duty truck weighing from 6,000 – 8,500 pounds.

my commentary: i think this is a positive thing. the program has spurred demand in germany, for instance. i also think that it is good that the "buy american" provisions in earlier drafts has been dropped, not only because it is vague and unenforceable but because the question of whether a vehicle is "american" or not doesn't have a straightforward answer (company headquarters location? assembly location? what about vehicles assembled in canada or mexico, still domestic as the technical definition would argue? percentage of "domestic" parts? percentage of "US" parts, as domestic includes canada and mexico?)

i foresee one big criticism: that the mileage improvement for trucks and SUVs is (nominally) minimal. this is true in one sense, but recall that the improvement in absolute fuel consumption, as in gallons per mile, is much greater than the mpg number might suggest. www.mpgillusion.com for the curious. personally, i would like to see a stricter standard for light-duty trucks and SUVs.

 

[X3pilot]

Interesting. I wonder how they will determine mpg differences? The mpg as based on avg by EPA. Those tend to be inflated. Actual mpg? Dyno tests for considered cars? Costly and not effective.

I think the American based vehicles part should remain. But then again, most cars people buy are built in the US.

NPR covered the Germany thing this morning. Most economist in Germany consider the vouchers a "band aid" and a Merkel re election voucher.

Car Sales May Reboot Germany's Economy

 

[X3pilot]

Oh, and I wish the government would get this serious about school vouchers.

(I know, another thread)

 

[Westy]

I love the fact that our economy is purely based on people wasting money. When things slow down we need the government to provoke us to waste more money.

 

[syadasti]

I love the fact that our economy is purely based on people wasting money. When things slow down we need the government to provoke us to waste more money.

Especially wasteful if they crush the old cars too...

 

[X3pilot]

Change my vote. I'll take a voucher for any car NOT built with UAW workers.

UAW Readies Opposition To GM Recovery Plan Ahead Of Talks

We bailed out the industry with no concessions by them, now they will own a combined 66% of the US Big Three?

 

[X3pilot]

Especially wasteful if they crush the old cars too...

That was a point in the Germany story. They were trading in pretty decent gas mileage cars over there.

When the program runs out, then what? Our auto industry is still years away from recovery.

 

[gonefirefightin]

sweet, I have a 1990 F-250 7.3 liter pre turbo diesel that qualifies for 4500 bucks, cant wait to get the specific info.


the truck is worth 1300

 

[Toshi]

I love the fact that our economy is purely based on people wasting money. When things slow down we need the government to provoke us to waste more money.

our whole way of life, of all our luxuries and conveniences, is wasting money in a sense.

 

[ohio]

Yeah, there are countless old clunkers that are worth ~$1000 that could net you an instant +$3500 towards a new car.

 

[valve bouncer]

They're planning a somewhat similar plan in Japan too.

 

[Toshi]

Yeah, there are countless old clunkers that are worth ~$1000 that could net you an instant +$3500 towards a new car.

it's not in the summary pdf that i posted but most proposed plans that i've seen have a provision that one must have been the registered owner of the functional vehicle for something like a year prior to being eligible for this program. otherwise every old clunker will instantly appreciate to $3499 overnight.

 

[ohio]

We bailed out the industry with no concessions by them, now they will own a combined 66% of the US Big Three?

I'm all for unions exchanging debt for equity. It means they will finally have a direct stake in the longterm financial success of the firm, rather than sucking it dry.