‘Cash for clunkers’ extended

Mileage requirements unchanged

Steve Hawley, Aug 07, 09.

The popular “cash for clunkers” stimulus program, which used up its $1 billion allotment in just one week, was granted another $2 billion, which should extend the program through the end of August, according to CNN. The extension passed the House last week and the Senate on Thursday before being signed into law by President Obama on Friday.

The program provides $3,500 to $4,500 to consumers for trading in old vehicles for new, more fuel efficient models. While some senators in both parties had expressed an interest in strengthening the fuel economy requirements, the extension maintained the existing system, partly to ensure passage before Congress recesses for the month.

The New York Times reports:

A crucial question is how much Americans will actually save on gasoline. The Transportation Department said shoppers had been turning in the bigger vehicles and buying small sedans, with an average improvement of 9.6 miles a gallon.

But some industry experts pointed out that the “clunkers” being traded in tended to be the older vehicles kept as spare cars in multicar households, and driven very few miles every year.

US News & World Report says that the program has led to a shortage of some popular fuel-efficient models such as the Ford Focus and Toyota Prius. However, CNN reports that trucks and hybrid SUVs are also very popular.

The program was far more popular than expected. Originally, the program was supposed to extend through November 1.

(Photo credit: phasmatisnox, released under GNU Free Documentation License)