The additional funds come less than a week after confusing and conflicting messages about the program's possible termination from the White House and the Department of Transportation. The latest action by the Senate makes it clear that the government wants to see the highly popular program continue. The money will be taken from part of the $787 billion stimulus package approved earlier this year.
Originally expected to last through the next several months at least, Ray La Hood, U.S. Transportation Secretary told Automotive News that the additional funding will extend the temporary program through Labor Day and spur about 500,000 new auto sales on top of the 250,000 already completed.
Under the original program, owners of old cars that cannot achieve above 18mpg in their combined cycles were eligible for a $3,500 voucher from the government towards the purchase of a new car that is at least 4mpg more efficient. Up to $4,500 is available to those who improve their gas mileage figures by 10mpg or more.
Trucks use a different system, where the new truck being purchased has to achieve at least 18mpg and also be 2mpg more efficient than the traded in vehicle. This gets owners the $3,500 voucher, while those improving their mileage by 5mpg get the full $4,500.