Cash For Clunkers 101

Auto industry and congressional supporters of legislation to reward people who trade in clunkers for new, fuel-efficient vehicles are looking to build pressure on the administration to back it.

The legislation, H.R. 1550, would pay up to $5,000 for trading in a vehicle at least eight years old. “It’s a triple winner,” said a Detroit executive based in Washington. “It helps the economy, it saves fuel and oil, and it helps the environment.”

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So far, the administration hasn’t aired an opinion on the legislation, also called the CARS Act, though the president’s auto task force has indicated support. It has the backing of House Speaker Nancy Pelosi, the UAW, and most automakers.

Those pushing the legislation said that they plan to step up pressure on the administration to back it, especially as the industry looks a week ahead to reporting historically poor sales figures for March autos. “Sales reports will be pretty miserable,” said the executive.

The supporters are considering advocacy ads and plan to highlight comparable programs unveiled overseas. In Germany, for example, a similar program has boosted auto sales by 20 percent for American carmakers.

The CARS Act would cover about five to 10 fuel-efficient cars and trucks from each North American carmaker or assembler in the program. The following companies would be included: General Motors, Chrysler, Ford, Honda, Hyundai, Mazda, Mitsubishi, Nissan, Toyota, and Volkswagen.

Vehicles expected to meet the CARS Act fuel-efficiency requirements:

• Chevrolet: Aveo, Cobalt, Colorado, Equinox, HHR, Malibu, Malibu Hybrid, Traverse
• Chrysler: PT Cruiser, Sebring, Town & Country
• Dodge: Avenger, Caliber, Caravan, Journey
• Ford: Edge, Escape, Escape Hybrid, Flex, Focus, Fusion, Fusion Hybrid, Ranger, Taurus
• Honda: Accord, Civic, CR-V, Element, Odyssey
• Hyundai: Santa Fe, Sonata
• Jeep: Compass, Patriot
• Mazda: B-Series, Mazda 6, Tribute, Tribute Hybrid
• Mercury: Milan
• Mitsubishi: Eclipse, Galant, Outlander
• Nissan: Altima, Quest, Sentra, Versa
• Pontiac: G6, Solstice, Vibe
• Saturn: Vue
• Toyota: Avalon, Camry, Camry Hybrid, Corolla, Corolla Matrix, Highlander, RAV4, Tacoma, Venza
• Volkswagen: Jetta

Find a particpating dealer in your area by going here. Fill out a trade-in form, a registered dealer will contact you as soon as possbile.

I’m torn, if you want to know the truth.

Last week, the U.S. Senate passed the “Cash for Clunkers” bill — they tucked it into an emergency war-funding bill — and President Barack Obama will soon sign it into law.

Here’s how the clunker bill works:

If your current car averages 18 or fewer miles per gallon, you’ll qualify for a $3,500 voucher toward the cost of a new car — so long as the new car averages at least 4 mpg more.

Better: If you buy a new car that averages 10 mpg better than your current car, the government will give you a $4,500 voucher.

That is why I’m torn.

I own two vehicles: a 2001 Nissan Maxima SE and a 1992 Chevy S-10 truck, both in excellent condition. My Maxima gets 19 mpg in the city — it averages 22 mpg — so it doesn’t qualify for government dough.

But my truck surely does. It only gets about 10 mpg. Of course, that isn’t a problem. The truck sits in my father’s garage most of the time. It goes out only when someone in my family needs to pick up a piece of furniture or some mulch.

I love that truck.

It’s dated two-tone silver-and-maroon paint job, white-letter tires and red velour interior scream “1992.” It’s the kind of vehicle somebody like Bill Clinton might have used to pick up someone like Monica Lewinsky.

Despite its coolness — despite its near-mint condition — the truck is 17 years old. In the real market — the free market — it is worth only $2,500. Which puts me in a troubling position.

Once Obama signs the clunker bill into law, my truck will instantly be worth $4,500. All I have to do is find a new vehicle that gets 22 mpg — not hard to do.

Of course I don’t need or want a new vehicle. I love my Maxima. And my truck is perfect for what it is intended to do.

And I can’t bear the thought of what will happen to my beloved truck if I take the deal. All vehicles traded in under the clunker program will be crushed into a block of steel and smelted. Not even the transmission or the motor can be salvaged.

But then again, one must keep emotion out of financial decisions. Only the government is dumb enough to pay me $4,500 for a $2,500 vehicle — and only a dummy would walk away from a $2,000 gain.

Sure, I know what the critics are saying: The program’s $1 billion price tag is a waste of money at a time when we’re bleeding red ink. I know we’ve already squandered some $30 billion meddling in the private auto industry and have likely made things worse, not better.

I know the unintended consequences of the government’s clunker program will hit the poor and middle class the hardest. Even with government perks, many people can’t afford a new car. Because the program will take thousands of used cars out of service, it will cause the cost of used cars to go up.

I know the political class is trying to impose a desired outcome on us. They’re eager for us to drive ever dinkier cars. I know they’re bribing us — with our own dough — to make us bend to their will.

But then again, this will surely be my last chance to qualify for a government perk of any kind.

I’m generally on the paying end of government programs — not the receiving end — and all of us will be paying plenty more if Obama succeeds in signing a torrent of big-spending programs into law.

And so I am torn.

I had been happy with my two perfectly good vehicles, but, suddenly, I’m thrust into the throes of a major automotive decision. I’ve been avoiding my truck lately. Wracked with guilt – I can’t believe I may be bought off for a lousy 2,000 bucks — I can’t look my truck in the headlights.

Such are the peculiar thoughts that only the government can produce.

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Tom Purcell is a humor columnist for the Pittsburgh Tribune-Review. Visit www.TomPurcell.com or e-mail him at Purcell@caglecartoons.com.

Find a particpating dealer in your area by going here. Fill out a trade-in form, a registered dealer will contact you as soon as possbile.