House passes “cash for clunkers” bill in U.S.

The House has finally approved a “cash for clunkers” bill that aims to boost new car sales by allowing people to turn in their old gas-guzzling cars and trucks for vouchers worth up to $4,500 toward more fuel-efficient vehicles.

With President Obama’s blessings, the House approved the bill 298-119. The auto industry is happy with the incentives after months of poor sales.

The vehicle scrapping bill has been under negotiations for months as lawmakers try to find a solution that boosts car sales while providing some environmental benefits. Similar programs in Europe that have already boosted auto sales.

While opponents feel the bill fails to include incentives for used vehicles and represented an “artificial” incentive, the House and Senate appropriators were already discussing the provision of $1 billion for the “cash for clunkers” program, which aims to generate about 1 million new car sales. Since the yearlong vehicle program is expected to cost $4 billion, lawmakers will attempt to find additional funding later this year.

Under the House bill, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18 miles per gallon or less for one getting at least 22 miles per gallon. The value of the voucher would grow to $4,500 if the mileage of the new car is 10 mpg higher than the old vehicle. The miles per gallon figures are listed on the window sticker.

Owners of sport utility vehicles, pickup trucks or minivans that get 18 mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2 mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5 mpg higher than the older vehicle. Consumers could also receive vouchers for leased vehicles.

The bill would direct dealers to ensure that the older vehicles are crushed or shredded to get the clunkers off the road. It was intended to help replace older vehicles, built in model year 1984 or later. Opponents of the bill fear that even a Hummer H3 would qualify as a new car purchase, considering it is more efficient than some older trucks.

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