SEMA persuaded Congress to place a 25-year limit on trade-in cars and expand recycling opportunities under ‘cash for clunkers’ legislation. Under the controversial bill, consumers will receive a voucher to help buy a new car in exchange for scrapping a less fuel-efficient vehicle. SEMA was able to mitigate the program’s effects by convincing lawmakers to include a requirement that the trade-in vehicle be a model year 1984 or newer vehicle. The provision helps safeguard older vehicles that may possess ‘historic or aesthetic value’ and are irreplaceable to hobbyists as a source of restoration parts.
The measure also allows all parts to be recycled except the engine. Lawmakers were convinced to permit the drive train to be recycled if the transmission, drive shaft or rear end are sold as separate parts. The vehicle scrappage legislation was passed by the U.S. House of Representatives by a 298-119 vote. President Obama has backed the plan and passage in the Senate is expected in the near future.
Proponents claim that the so-called “Consumer Assistance to Recycle and Save Act (CARS)” may spur an estimated 625,000 vehicle sales. The program will last for one year.
“SEMA has consistently supported efforts to spur new car sales, but is disappointed that Congress ignored evidence that vehicle scrappage programs will not achieve claimed environmental benefits,” said SEMA President and CEO Chris Kersting. “However, we are pleased that lawmakers agreed to spare from the crusher older cars and parts that help drive the restoration aftermarket and the passions of many in the automotive hobbyist community.”
Under the program, consumers who agree to scrap a trade-in car that gets 18 miles per gallon or less (15 mpg or less for heavy pick-ups and vans) will receive a voucher to buy a qualifying new car. The voucher will range from $3,500 to $4,500 based on the new car’s fuel efficiency. The program primarily targets SUVs and pickups since most passenger cars manufactured during the last 25 years get more than the 18 mpg combined city/highway requirement. Vehicle mpg ratings are listed at www.fueleconomy.gov.
The $4 billion program will begin when it is signed into law by the president. The car buyer 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. They will receive a $4,500 voucher if the passenger car was at least 10 mpg higher and the truck/SUV was at least 5 mpg higher.
“SEMA continues to support initiatives that encourage the installation of specialty equipment to reduce emissions and increase fuel economy,” said Kersting. “Looking to the future, SEMA will work with Congress to pursue more efficient and business-friendly environmental approaches.”
Fact Sheet
Consumer Assistance to Recycle and Save Act (CARS)
Consumers may 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. The mpg values are EPA combined city/highway fuel economy as posted on the window sticker. MPG ratings are listed at www.fueleconomy.gov.
Trade-in vehicles must:
- Be in drivable condition
- Be continuously insured and registered to the same owner for at least one year
- Have a combined city/highway fuel economy value of 18 mpg or less
- Have been manufactured in model year 1984 or later
- Work trucks must be model year 2001 or earlier regardless of mpg
New vehicles:
- Must have a manufacturer's suggested retail price of less than $45,000.
- Passenger Cars: The trade-in vehicle must get 18 mpg or less. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.
- Small Trucks and SUVs: The old vehicle must get 18 mpg or less. New small trucks or SUVs (weighing up to 6,000 pounds) with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old vehicle, the voucher will be worth $4,500.
- Large Light-Duty Trucks: The old vehicle must get 18 mpg or less. New large trucks (pickups and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.
- Work Trucks: Consumers can trade in a pre-2002 work truck (defined as a pickup or cargo van weighing from 8,500–10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. Only 7.5% of the total funds can be used for vouchers for the purchase or lease of a work truck.