House and Senate agree on $1 billion for ‘Cash for Clunkers’

The House and Senate finally reached an agreement late Thursday night to set aside $1 billion for a “Cash for Clunkers” program to boost auto sales. The package will be included in the $106 billion wartime spending bill. The program, which will offer vouchers of up to $4,500 for new car shoppers that turn in their older gas-guzzling models, has been sought by automakers as an assistance to increase auto sales that have plunged 40 percent.

Under the program, owners that get 18 mpg or less in combined highway and city mileage can turn their cars in for a cash voucher. If the new car gets at least 4 mpg higher, the voucher would be good for $3,500; a 10 mpg improvement would earn a $4,500 voucher.

Pickups would also be eligible as long as the new vehicle has a mpg rating of 18 and is at least 2 mpg higher than the shopper’s old vehicle. A new pickup that gets 5 mpg higher than the old model gets a $4,500 voucher.

The House and Senate are expected to pass a version of the bill next week. However, the $1 billion amount is said to be far short of the full cost of such a program, estimated at $4 billion.

– By: Omar Rana

Source: Detroit News