A piece of legislation which may provide strong motivation for qualifying citizens to go out and purchase a brand new vehicle passed the House by a wide margin last week, getting significant support from both sides of the aisle. The bill’s official moniker is Consumer Assistance to Recycle and Save (CARS), but it is popularly known as Cash for Clunkers. It was supported by an international auto association.
It was introduced in the House by Betty Sutton (D-OH) and was given a boost by Speaker Nancy Pelosi (D-CA). It passed on a vote of 298 to 119.
The bill offers consumers up to $4,500 if they turn in an old, gas-guzzling vehicle, which can go toward the purchase of a brand new vehicle – the catch being that the new vehicle must have a significantly better miles-per-gallon rating.
“This bill is quite a remarkable piece of legislation and the timing is perfect,” commented Pelosi. “And when they trade in these cars, they will strengthen America’s auto industry, creating jobs and reducing layoffs and save more than 250 million gallons of gas.”
The bill was also endorsed by the Association of International Automobile Manufacturers (AIAM). “The nation’s economic recovery will not be complete without the revival of the U.S. auto industry,” said Michael J. Stanton, President and CEO of AIAM. “We encourage Congress to quickly pass this legislation and send it to the President for his signature. The sooner we get a program like this up and running, the quicker it will provide much needed help for consumers, auto dealers, suppliers and small businesses in communities all around the country.”
RBR/TVBR observation: Every car manufacturer is going to want a piece of this pie. The sliding scale of consumer reimbursement and MPG levels makes this an intensely fact-based proposition, with a premium on consumer education. Car manufacturers are going to want consumers to know the program exists, its details, and more to the point, what exciting new models the manufacturer has that qualify. This should generate some ad revenue.