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SEMA eNews Vol. 12, No. 25
"Cash for Clunkers" Legislation Signed Into Law
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Following months of contentious debate, Congress passed cash for
clunkers legislation which President Obama then signed into law. The
new law includes two SEMA provisions to help lessen the programs
potential impact on the automotive aftermarket and collectors.
The provisions exclude vehicles 25-years old and older from the
scrappage program and expand parts recycling opportunities. While
lawmakers intended the program to last about one-year, they were only
able to provide $1 billion in funds through the end of October 2009.
Lawmakers will pursue another $3 billion later this summer to fund the
program into 2010.
Vehicle Scrappage Program Highlights
General: Consumers may voluntarily trade in their older vehicles and
receive vouchers worth up to $4,500 toward the purchase or qualified
lease of a new, more fuel-efficient car or truck.
Trade-in Vehicle: Must be model year 1984 or newer, in drivable
condition and continuously insured and registered to the same owner
for at least one year. Eligible cars and trucks must have a fuel-
economy value of 18 mpg or less. Work trucks must be built before
2002. The mpg values are EPA combined city/highway ratings:
www.fueleconomy.gov
New Vehicle: Consumers will receive a $3,500 voucher if they buy a new
passenger car that was rated at 4 mpg higher than the older vehicle,
or a new pickup truck/SUV that was at least 2 mpg higher than the old
truck (1 mpg for heavy-duty trucks/vans). They will receive a $4,500
if the passenger car was at least 10 mpg higher and the truck/SUV was
at least 5 mpg higher (2 mpg for heavy-duty trucks/vans). The new
vehicle must have a manufacturer's suggested retail price of less than
$45,000.
Duration: Lawmakers authorized $1 billion to issue vouchers towards
the purchase or qualifying lease of a new vehicle made between July 1
November 1, 2009. Later this summer, lawmakers are expected to
authorize another $3 billion to extend the program into 2010.
Lawmakers estimate that the scaled-back version will spur 150,000 car
sales and a $4 billion program would net 600,000 sales.
Regulations: It will likely take the National Highway Traffic Safety
Administration (NHTSA) several weeks to issue regulations outlining
how dealers will be reimbursed for vouchers and other program details.
The NHTSA will work with the EPA to compile a comprehensive list of
eligible trade-in vehicles, by make and model, to be posted on the
Internet and made available through other means.
Questions? Contact Stuart Gosswein.
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