With domestic auto sales in the midst of the worst slump in decades, some folks in Washington are aiming to clear the massive backlog of unsold new cars and trucks with more Monopoly money. Representative Betty Sutton (D-OH) has introduced the Consumer Assistance to Recycle and Save (CARS) Act, which rewards new car buyers with a $3,000 to $5,000 bounty to purchase a more fuel-efficient car or truck … or to use mass transit.
That’s right, my fellow Americans. If you own a vehicle that is eight years old or older, you could be eligible for the latest round of free government cheese … providing that you purchase a new car that is rated at 27 miles per gallon (MPG) or higher on the highway or a new truck that is rated at 24 MPG highway or higher.
A similar program was introduced in Germany that has been credited with raising their domestic auto sales in February 2009, over the same month last year. The thought, “if it works in Germany, why not in America?” leads to the obvious question. Why set the MPG limit so low?
The Cash for Clunkers bill, if approved, would be the maraschino cherry on top a growing ice cream sundae of incentives for Americans to buy a new car. Federal tax credits currently include a state tax rebate, as well as rebates on specific alternative fuel vehicles (aka: the hybrid tax credit).
We’ll have additional analysis once we’ve had the opportunity to comb through the bill …