LIL' BUDDY'S BLOG - Car Buyers - Will "Cash for Clunkers" Congressional Proposal Make You Buy a New Car?
THE CHICAGO IL REAL ESTATE MARKET, AND OTHER THINGS CHICAGO, FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!
Hey, you dogs! Sometimes, in life, you are the DRIVER. Sometimes, the PASSENGER. On this day, my Human Dad, Team Leader Dean, was giving me a ride!
What's is YOUR ride? A fuel-efficient Honda Civic, or Hybrid Toyota Prius? Or, one of those extremely-hard-to-sell gas guzzlers popular just a few years ago, when the U.S. Economy was humming, and gas was cheap and plentiful?
Well, if you own one of the gas hogs, the U.S. Congress, and the Obama Administration, might be incentivizing you to trade it in, for a new, far more fuel-efficient car. See the story by Jim Puzzanghera and Ken Bensinger's in yesterday's Chicago Tribune.
In Germany and France, this "Cash For Clunkers" idea has fared pretty well, and spurred new car sales. A similar program in California, aimed at reducing vehicle emissions in that state, have not been nearly as popular, however.
A bill being debated in the U.S. House would offer graduated incentives to drivers who trade in or junk a car or truck a minimum of eight years old. They would receive a cash voucher of $3,000 for buying a new car or truck which gets a minimum of 24 miles per gallon, or one for $5,000 if the car gets more than 30 MPG. Only cars assembled in the U.S. would qualify for the $5,000 voucher. Cars qualifying for the $3,000 credit would have to be built in North America. The maximum price of the car, in any event, would be $35,000.
The U.S. Senate version would have no country-of-assembly requirement. Cash vouchers to car buyers would range between $1,500 and $4,500, depending on whether the purchased car was used or new, and would be based on the age of the trade-in. The maximum car price would be $45,000, and the acquired vehicle must exceed Federal Mileage Standards by a minimum of 25%.
The sponsor of the Senate Bill, Diane Feinstein of CA, also supports a separate state bill offering drivers up to $1,000 for scrapping their old gas-guzzling, high-emissions vehicle. No new car would have to be purchased to participate in this State of CA Program.
Some experts believe that this kind of program, if it is as successful as that being offered in Germany, could boost Auto Sales by as much as 3 Million Units, while at the same time reducing emissions and improving average vehicle miles. Naturally, the increased sales would be welcome by U.S. Automakers, operating near bankruptcy right now.
But the program has a big downside - an incredible price tag!
Although many lawmakers feel this ambitious program could be funded by shaving some money from the $787 Billion Economic Stimulus Program passed in February, the cost of such a program is a matter of debate. Some say such a program could be funded by as little as $1.8 Billion take from the Stimulus Money, much of which coming from funds recently rejected by several Republican Governors across the U.S.
However, Barclay's Capital estimated a program as successful as the German one would cost as much as $12 Billion.
The debate ranges on!
So stay tuned, you dogs! Maybe, soon, I'll be able to trade this old, bucket-of-bolts Buddy Mobile for a hot, new, fuel-efficient, low-emissions rod!
YOUR ACE REPORTER ON FOUR PAWS,
BUDDY HOLLY MOSS & DEAN'S TEAM CHICAGO
