Cash For Clunkers Passes Senate For President To Sign

The Senate passed a reduced $1 billion cash-for-clunkers bill sending it to President Obama to sign. The current bill was cut back from a one-year, $4 billion program after some senators were concerned that not enough is being done to assure more fuel-efficient vehicles will get on the road.

It means the program, that offers $3,500 to $4,500 cash vouchers to consumers who trade in their cars for new, more fuel-efficient vehicles, will run for less than four months instead of a year as first planned. The bill goes into effect a month after Obama signs the bill.

Scrappage programs in Western Europe have led to 500,000 additional passenger vehicles sold in the region from January through May 2009.

Trade in a car that has been registered to you and in use for at least one year, and has a combined city/highway fuel-economy rating of 18 or fewer miles per gallon and then buy a new car, priced at $45,000 or less that has a window sticker EPA rating of at least 4 mpg better than the old one and you receive a $3,500 voucher, at least 10 mpg better, and you get a $4,500 discount voucher from the dealer selling you the new vehicle.

My clunker is an SUV which has more lenient rules. SUVs need only get 2mpg better for $3,500 and 5mpg better for the $4,500. My average condition 1996 Toyota 4Runner with 120,000 miles has an Edmunds.com Private Party True Market Value (TMV) appraisal of $3,205. The trade-in value is $2,502 and the dealer retail value is $4,427. Edmunds.com rates my 4Runner at 17mpg so I need to find a vehicle that has a combined city/highway 22mpg to get the maximum $4,500 voucher.

Now the search begins for a new SUV costing $45,000 or less - no problem. Better than 22mpg and one the wife will like - problem, unless you're happy with a hybrid-powered SUV which are rated 28-32mpg or a compact SUV like a Honda CRV, Nissan Rogue or Suzuki Grand Vitara which just reach the 22mpg threshold. I see the 2010 Chevy Equinox is rated at 23-26mpg according to Edmunds.com. Then, on second thought, I could pay nothing and drive my clunker 4Runner for another 100,000 miles and keep my powder dry, money in the bank.

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• Posted by: Richard Saxton June 18, 2009, 3:24 PM
• Categories: Vehicle News