Cash-for-Clunkers

Democrats and President Obama have agreed on "Cash-for-Clunkers Plan." Eligible drivers would receive a reimbursement voucher for the purchase of a new or used vehicle with a fuel economy rating that exceeds the CAFE target for that class of vehicle by at least 25 percent. The bill also requires that the voucher be used towards the purchase of a vehicle that has an MSRP of less than $45,000, is model year 2004 or later, and meets or exceeds federal emissions standards. Vouchers could also be redeemed for transit fares for participating local public transportation agencies.

Drivers, who apply for the program, must ensure that their vehicles turned in for scrapping match the following criteria:
• Vehicles must be in drivable condition;
• Be currently registered in the U.S.; and
• Have a when-new fuel economy rating of less than 18 miles per gallon (as reported by the original manufacturer for purposes of CAFE compliance).

The bill specifies that during the first year of the program, vouchers will be issued for the following amounts:
For traded-in vehicles that are model year 2002 and later, drivers would receive a voucher for:
1. The purchase of a new vehicle: $4,500
2. The purchase of a used vehicle: $3,000
3. Transit fare credit: $3,000
For traded-in vehicles that are model year 1999 – 2001, drivers would receive a voucher for:
1. The purchase of a new vehicle: $3,000
2. The purchase of a used vehicle: $2,000
3. Transit fare credit: $2,000
For traded-in vehicles that are model year 1998 and earlier, drivers would receive a voucher for:
1. The purchase of a new vehicle: $2,000
2. The purchase of a used vehicle: $1,500
3. Transit fare credit: $1,500

In each subsequent year (2010, 2011, and 2012), the model years would be advanced by one year. Vouchers would be eligible for redemption for up to two years after the date of issuance, and no individual would be eligible to obtain more than one voucher in any three-year period. Dealers and scrap recycling facilities would also be eligible for a payment of $50 per vehicle, or an alternative amount to be specified by the Department of Energy.

Therefore, if you have a 2003 Escalade that is worth $15,000 on the open market, the government will give you $4,500 for it. But if you have a 1998 Ford Expedition that is worth $3,500, the government will give you $2,000 for it.

Don't we live a great country. You have to love it. By the way, I have to sign-off and get to the junk yard before it closes. However, I will leave you with a "sound-bite" from the announcement about the "Cash for Clunkers" by Obama, Bernanke, and Geithner.