From the beginning the Specialty Equipment Market Association (SEMA) joined by the Automotive Aftermarket Industry Association (AAIA) has opposed the “Consumer Assistance to Recycle and Save Act of 2009″, also known as the CARS Act or more infamously as Cash for Clunkers.

Sponsored by Rep. Betty Sutton, D-Ohio, and co-sponsored by Rep. Bruce Braley, D-Iowa, John Dingell, D-Michigan, and Candice Miller, R-Michigan, the bill originally offered vouchers starting at $3,000 to owners of vehicles that are at least eight years old upon trade-in to purchase more fuel-efficient vehicles. The aim of the bill was to give owners of “high polluting automobiles” tax-payer paid vouchers to help replace the vehicles with “new fuel efficient and less polluting automobiles or public transportation”. But it is not quite as simple as it seems be on the surface.

With non-North American makes originally excluded, the Detroit Three automakers and the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) supported the bill while foreign automakers and aftermarket associations opposed the bill.

SEMA and AAIA have argued that the bill could do more harm than good by allowing individuals to take advantage of taxpayers by trading in cars that are underutilized, especially if those individuals own more than one car. SEMA states that the program may produce artificial increases in car sales, but will not do enough to reduce emissions, increase fuel efficiency or decrease dependency on foreign oil. They further attest that the program will eliminate a source of parts for aging cars and consequently be a threat to businesses in the industry which serve those vehicles.

“Cash for Clunkers would prematurely destroy vehicles and their valuable parts and components, denying more affordable used vehicles and parts to millions of low and middle income families…”

AAIA has added that “Cash for Clunkers would prematurely destroy vehicles and their valuable parts and components, denying more affordable used vehicles and parts to millions of low and middle income families who cannot afford to purchase a new car even with a $3,000 to $5,000 government voucher.” They suggest that the scrappage program will increase landfills and junkyards and increase the demand of energy and resources to build new cars.

Those who support the bill call the arguments “dubious” stating that useful parts could stripped off vehicles before they are destroyed citing that 84 percent of cars by weight are recycled and 95 percent of vehicles go through some sort of recycling process in the U.S. Supporters state that vehicles which are collectible and/or historical would also be unaffected as owners of such cars are unlikely to take advantage of the program. As evidence of success, supporters point to programs in foreign countries such as in Germany, the European Federation for Transport and the Environment.

Through multiple revisions, the final guts of the CARS Act hinges on gas efficiency. Passenger cars and light trucks must get less than 18 MPG for owners to be eligible for vouchers. The program now applies for both imported or domestic vehicles as long as the new car gets at least 4 MPG more than the trade-in model. At 4 MPG, owners receive $3,500 vouchers. If the mileage is at least 10 MPG or better, owners receive $4,500 vouchers towards the new vehicles.

Trade-in’s will still be scrapped in order prevent gas-guzzling vehicles from re-entering the used car market.

The program may be offered only to the first 1 million customers, so anyone who is interested will have to act fast. However, Brian J. O’Conner, columnist at Detroit News warns that although “Cash for Clunkers seems like a no-brainer” keep in mind the depreciation of a new car compared to a slightly used model. He exemplifies buying a new Pontiac Vibe at an average of $19,800 which becomes $15,300 (after a $4,500 voucher for trade-in) to a slightly used 2-year old Vibe for $13,200.

Currently serving in the US Army, Alan has recently returned from his tour. Cruising with the top down in his S2000 and enjoying the wind on his Gixxer is what he does in his spare time. His contributions include writings and photography to many of the articles on JDMOrigins.com.

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