Under the House bill, car owners could get a voucher worth $3,500 if they traded in a vehicle getting 18mpg or less for one getting at least 22mpg. The value of the voucher would grow to $4,500 if the mileage of the new car is 10mpg higher than the old vehicle.
Owners of SUVs pickup trucks or minivans that get 18mpg or less could receive a voucher for $3,500 if their new truck or SUV is at least 2mpg higher than their old vehicle. The voucher would increase to $4,500 if the mileage of the new truck or SUV is at least 5mpg higher than the older vehicle. Consumers could also receive vouchers for leased vehicles, reports the Associated Press.
Importantly, the bill also would direct dealers to ensure that the older clunkers are crushed or shredded to get them off the road.
Similar plans have been in place in Germany for some time now, and citing these as the chief cause of spikes in new car sales in the German market, domestic automakers such as Ford and GM are convinced that a similar initiative in the U.S. could have good results.
Opponents said the bill failed to include incentives for used vehicles and represented an artificial incentive for the industry.