Have you heard about the "Cash for Clunkers" proposal in Congress which is supposed to be a plan to help the American Auto Industry as well as the environment by putting more fuel-efficient vehicles on the road? Under the plan, consumers have a monetary incentive to swap out "old" vehicles that get less than 18 mpg with cars that get at least 22 mpg. If the new car's mpg is at least 4 mpg better than the old vehicle, the consumer would receive a $3500 voucher. If the new car's fuel efficiency is 10 mpg better than the old vehicle, the consumer would receive a $4500 voucher.
For light-duty trucks, the standard is even less stringent. If the new truck or SUV gets only 2 mpg more, the voucher would be worth $3,500. If the mileage improved just 5 mpg, the voucher would be worth $4500. There are other incentives for work trucks and larger light-duty trucks.
Is this a good idea? There is alot of controversy. Would it increase auto sales? Maybe. Proponents use Germany as an example where they have a similar program and auto sales have increased. One huge difference I'm seeing between what is proposed here and what is happening in Germany is that in Germany, people don't drive huge gas-guzzling vehicles. They buy and drive more fuel-efficient vehicles.
This program seems like it would allow people to trade in vehicles that are running just fine for vehicles that get marginally better fuel economy. Vehicles that get only 22 mpg are still substandard. The cost of the plan itself is estimated at 3-4 billion dollars. The plan would be in effect for a year and is projected to boost car and truck sales by 1 million. Hopefully, people will buy vehicles that get substantially better gas mileage than 22 mpg instead of doing something like trading in a Hummer and getting a Suburban. My in-laws are planning on trading in an old truck and buying a Toyota Prius. It doesn't help the US Auto manufacturers, but the Prius is definitely very fuel-efficient.
I guess we'll see what happens with this plan in Congress though it appears that it will be passed and probably in the very near future.
