Cash for clunkers clears

The U.S. House and Senate recently approved an incentive designed to take gas-guzzling automobiles off the road in what has been deemed the "cash for clunkers" program.

The bill, which was tacked onto the war funding budget and signed into law Thursday by President Barack Obama, offers consumers the opportunity to use a government voucher to trade in their older-model vehicle for a new, more gas-efficient one.

"I think it will put some people back to work," said Bob Poynter of GM Cars and Trucks in Seymour. "It's not a bad program."

Participating dealerships will take $3,500 off the price of a new car that gets at least 22 mpg if the buyer's old car gets fewer than 18 mpg. The voucher will increase to $4,500 if the new car gets 10 mpg more than the older car.

Other conditions apply such as the new car's price must be less than $45,000, motorcycles can't be purchased with the voucher, the new car must be purchased between July 1 and Nov. 1 and there is a limit of one voucher per customer.

While preliminary provisions are set in place, the kinks of the bill won't be completely worked out until late July, according to www.cars.gov - the official government Web page for the program.

One of the biggest concerns of the bill is if it will include the purchase of newer used cars, as well.

Jay Deckard of Deckard Auto Sales on West Tipton Street in Seymour, said it's "a little too early to tell" whether it will include used cars.

Deckard, who was initially concerned the bill would only work for new cars, studied up on what little information is available.

"There aren't going to be many people who it's going to help," he said of the 10 mpg minimum increase to get the full voucher amount. "There was a farmer who wanted to trade in his trucks," he said. "He (the farmer) thought he could get new trucks."

Deckard said it wasn't possible because of the gas mileage requirements.

To permanently get older models - cars built after 1984 - off the road, the vehicle traded in must be destroyed and not resold. It is unclear who will take responsibility for destroying the car.
"We may have to pay for it," Poynter said, "or we may get paid for the scrap metal."

Poynter said that with a $4,000 rebate on a truck from his lot, for example, plus the possible $4,500 voucher, customers could get a good deal.

However, the program isn't without its opponents who say that in the current economy very few people would be willing to take on a new monthly car payment.

Republicans in the Senate who are concerned about the budget opposed the bill. Environmental-leaning legislators also voted against the bill, saying it doesn't encourage buying high-mileage cars and wasn't valid for used cars.

Indiana 9th District Rep. Baron Hill of Seymour supported the measure. He was one of the House co-sponsors of the bill.

Many details have kept dealerships from fully understanding how the bill will work.

"If the government has anything to do with it, it's going to be complicated," Deckard said.

Deckard also pointed out that cheaper cars are already scarce, and parents looking to buy their teenagers cars for a few thousand dollars won't find them as this program goes into effect.

"If it will work on used cars, it won't hurt us," said Deckard. "Who it's going to hurt are the lower-priced car dealers."

New auto dealerships, on the other hand, are welcoming the opportunity to lure potential buyers to car lots.

"If somebody needs a car, it's great," Poynter said. "There are no catches to it."

Poynter is positive about the program.

"The biggest thing is to stimulate the economy and put some people back to work," he said. "It will have a snowball effect."

Bryan Bowman of Bowman Dodge-Chrysler-Jeep in Seymour could not be reached for comment.