Save the Economy: Crush Your Car!

January 29, 2009

Germany offers a government discount of $3,280 on a new car bought by owners who scrap their old polluting cars. The US Congress is considering a discount of $4,500 if drivers crush old gas-guzzlers and buy fuel-efficient new models.

It’s an unlikely way to save the economy—and the environment—at the same time, but a simple program adopted two weeks ago by Germany seems to be a runaway success. It offers a government discount for new cars bought by owners who scrap their old cars. The hotline for applications got 270,000 calls on Monday, and a further 150,000 on Tuesday, said local media.

Under the program, owners of cars at least 10 years old receive a discount of EUR 2,500 (roughly $3,280) if they buy a new car that meets Euro-4 emissions standards. The recipient must provide paperwork to prove that the vehicle replaced was scrapped and its parts properly recycled. The scrapping program was part of an environmental bill to reduce CO2 emissions, but it won support from automakers who believed it would boost anemic sales of new cars.

In legislation introduced earlier this month in the US House and Senate, American car owners could get vouchers of up to $4,500 when they scrap their old fuel-inefficient vehicles and buy a vehicle that meets high-mpg targets. The proposal, called “Cash for Clunkers,” calls for the new vehicles to be less than $45,000 and a 2004 model year or later. The legislation aims to remove 1 million polluting gas-guzzlers a year for four years—at a cost of $1 billion to $2 billion per year.

The German government allocated EUR1.5 billion—enough to provide subsidies for 600,000 new cars—although researchers projected lower numbers. The program might increase new-car sales in Germany by 200,000 vehicles, or roughly 7 percent of the country’s market of 3 million new cars a year, said market researcher Polk. PricewaterhouseCoopers expected up to 300,000, or 10 percent.

Calls for the total pool of subsidies will have arrived in less than a week, though the ultimate number of participants remains to be seen. According to the association of German vehicle manufacturers, Verband der Automobilindustrie (VDA), reducing the average age of the country’s vehicle fleet by just one year could eliminate 2 million metric tons of CO2 emissions each year.

An Idea Worth Trying?

In the US, few such programs exist. California and other states have funded various iterations of Cash for Clunkers, with the goal of removing the oldest, most polluting cars from the roads.

California’s program paid $650 to $1,000 for currently registered and running vehicles with first generation catalytic converters, or no converters at all. Even when new, these cars produced 10 times or more the harmful emissions of a new car today. And after 20-plus years, many of them were grossly out of tune, routinely failing California’s annual “smog check” inspection.

The programs are remarkably cost effective, looking at volume of pollutants eliminated against cost. Car collectors often loathe these programs and lobby strongly against them, since they’re an incentive for old cars to be destroyed. While even the most paranoid admit that voluntary Cash for Clunkers programs are a far cry from black-clad government agents breaking into garages to seize and crush your cherished old car, distrust of environmental laws seems to run high among collectors.

So what do you think: Should the US create scrapping incentives, whether for economic recovery or environmental reasons—or both?


Posted in Cash for Clunkers, Cox, Environment, Incentives and Laws, News, UsedCars.com
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  • Anonymous

    Of course. It is a win win.

  • moishe k

    which cluncker owner can afford a new car (even with a subsidy)

    taxis burn the most fuel, than they are sold to to the lowest income drivers, who hold on to the cars as long as it runs.

    Subsidizing or regulating all taxis to drive high MPG cars would have an immediate impact, & in a few years these cars would be sold to the poor

  • Boom Boom

    The biggest issue that I can see with the program is it opens up loopholes for various different kinds of scams. Folks will find ways to take advantage of the system while not taking old cars off the roads. The folks driving the old cars are driving them because that is what they can afford. A $4,500 credit probably won’t be enough to convince someone to buy a $15,000 car if they can only afford the $5,000 POS they’re currently driving.

    I think the money might be better spent on incentives for hybrids and other lower emissions vehicles (small cars, etc.). Just use the CAFE standard as a MPG target. If the car gets over the MPG, it gets an incentive. If the car gets under the MPG, it get a tax. The size of the incentive/tax would be proportional to the MPG difference. Don’t favor any particular system. Just favor the result: Less fuel, less emissions. Electric cars/hydrogen/etc. cars would end up under a different system, but right now they’re a tiny minority of vehicles sold.

  • Anonymous

    @MoisheK: FYI, the city of New York has instituted new regulations that require taxis put into service on a given date to achieve minimum mileage. The taxi owners are fighting it tooth and nail, but sooner or later the city is likely to win.

    Details here: http://www.hybridcars.com/fleets/latest-threat-nyc-hybrid-taxis-24967.html

  • Samie

    I wonder if a program like this could artificially inflate the value of a used car? Teenagers and some poorer folks who maybe just looking for a clunker car for 1-4K may have problems buying a used car. There maybe a greater retained value of a used inefficent car then say one that does not meet standards for a rebate….

    The question maybe how efficient is it? Whats the emissions criteria?, and whats the price, blue book value of the used vehicle (that may not matter since lower end cars tend to be some of the most fuel efficient/& reduced emissions vehicles out there) This program may create a situation where people keep cars for longer periods of time. I guess car trash yards could pop-up in rural areas maybe someone paying a storage fee until the car becomes say 10 yrs old then cashing in when they buy a new car though annoying annual city and state car taxes could stop this from happening. Not sure if any of this would happen but I wonder about abuses under a plan like this. But of course I don’t know the details of this legislation so.. much of what I said could have already been addressed.

  • Paul Beerkens

    This is a great idea.

    The timing is maybe not ideal because I feel that we are on the doorsteps of a new level of fuel efficient cars. We have reached 50Mpg and there are a lot of companies working on 100Mpg vehicles now.

    One of the concerns has always been that it will take a long time for these high gas mileage cars to replace the current cars on the road but a program like this will accelerate this process. Also as mentioned in this article it is a cost efficient way of reducing pollution and fuel consumption.

  • Shines

    Let’s see. I buy an old clunker that barely runs for $800.
    I sell my 01 Camry for 5000.
    I get $4500 for crushing the clunker
    So I’m up 3700
    I buy a new 28000 Fusion and get the 3400 tax credit
    So I end up with a brand new hybrid 40mpg for
    7100 off sticker; add the procedes of my camry sale and drive away with the new car for $15900.
    What a deal!!

  • Samie

    Interesting point Boom Boom

    I guess what I would do is just use the Gas Guzzler Tax in a step up approach to slowly encourage higher and higher mpgs/and reduced emission rates. Reward industry through tax rebates or reduced interest gov. loans when they met vehicle class targets.

    What I worry about with rebates (to consumers) is the chance that auto manufactures could increase the asking price of the vehicle and profit at the expense of taxpayers providing no or if any incentives that come directly from the manufacture. Of course as you said a tax could be placed on either consumers or industry but like other solutions that involves taxing consumers you have serious political issues/consequences, and/or creating division among political ideologies and the possibility of delaying much needed advancements in the way we use energy.

  • Shines

    Something tells me I wouldn’t get away with it…

  • RKRB

    One question is whether the $4500 is a good use of the money, or whether the $4500 x X would be better spent elsewhere. I’d like to see some hard data on this (including data on how it has actually worked in Germany). The plan sounds good but may just be another example of political grandstanding.

    Another question is just how much it would really revitalize car sales, especially American car sales. The figure may be inflated by people planning on buying a new fuel-efficient car anyway, and suddenly an old abandoned clunker quickly turns into $4500. And just who defines a “fuel-efficient low emissions car” anyway? Will this repeat the incentives for a hybrid truck that gets maybe 3 or 4 mpg more than a standard one? This kind of scheme could promote dishonesty while making our esteemed government officials feel good (always a bad combination).

    Why would collectors not support this program? Few collectible cars are going to be scrapped, and part of recycling might be to make more common parts available to collectors.

    I’d sure feel better about this program if I saw some hard, well-thought-out data that addressed the may objections to the program. This has all the potential for another one of our government-supported taxpayer-financed scams for which no one takes responsibility.

  • AP

    BoomBoom, Shines, etc., you are pointing out the difficulties of tax incentives/penalties, etc., based on vehicle purchase rather than vehicle usage. They take too long to work, they often penalize people who don’t deserve it (charging someone who buys a Dodge Viper and drives it 1000 miles/year a gas guzzler tax is stupid), they are arbitrary (do you only subsidize non-SUV hybrids?) and they can be abused. And they do nothing to promote living closer to work, car-pooling, etc.

    All the more reason to make it simple: tax gas more, tax income less. Encourage the purchase of fuel-efficient cars AND driving them less, immediately. That’s how everyone wins (except maybe the oil companies).

    On the other hand, I do work for a domestic automaker, so if the government wants to promote new car purchases with a $4.5k kick-in, I’m not going to argue with them.

  • Gerald Shields

    Hell yes! As long as the US bill is similar to the German bill.

  • SS

    Samie and RHRB: I don’t think this would apply to abandoned cars, at least not if it is modeled after CA program which says the vehicles have to be in running condition and currently registered (I have a friend who tried to unload an old Chrysler that needed expensive repairs but couldn’t get it to run to qualify).

    Shines: are you related to Madoff? Sounds like a great scheme :) But you might have trouble getting the clunker for $800 if the owner knew about the program.

    I like the idea but generally don’t like trashing stuff that still works. I guess if there were good data showing that crushing cars and recycling the parts and manufacturing new cars (even if they are cleaner) ahead of schedule really helps the environment, I’d be for it. As the debate over ethanol from corn pointed out, you have to look at the entire chain from mining the ore to disposing the non-recyclable parts to see if this plan makes sense.

    It probably would increase demand for new cars though.

  • Gerald Shields

    The thing is the car owner has the burden to prove that the vehicle got crushed/recycled. Otherwise, you got these “middle man” who are putting the vehicles back as used cars or they are shipping them to other countries like China or India.

  • Gerald Shields

    SS, you said:

    “I like the idea but generally don’t like trashing stuff that still works.”

    It depends. After 10 years, most cars doesn’t have a lot of aftermarket parts so you can maintain the car. So even if the vehicle “still works”, the question becomes “for how long?”

  • Shines

    SS I can buy an $800 clunker at a place called Volunterrs of America. They resell the cars that people donate to charities to get the tax break… Oh wait! what about those charities under this plan? Who is going to donate their car to charity (I did once several years back) when they can junk ‘em for $4500?

    I keep repeating myself – I agree with AP’s comments above…

  • Samie

    AP
    Gas Guzzler Tax has/ is placed on manufactures ie this is not new or something consumers directly pay………. Google it! and yes it has worked!

  • jvoelcker

    @RKRB: Actually, the analyses of the German program before it began predicted that less than half the new cars would be German-made.

    The government chose to go ahead with it anyway, on the grounds that it was first an environmental program, which would also (secondarily) benefit the auto industry and hence the economy.

  • GR

    Sounds like a good plan. This could definitely be successful if they were to increase the gas tax and lower the income tax like AP said.

    One of the better parts of this plan is that the cars don’t have to be brand new. I know a lot of people that drive cars older than 10 years, and given a $4,500 incentive could possibly afford a 5 year old car (ie: a Toyota Corolla at $10k before incentives), but wouldn’t be able to afford a brand new car.

    One drawback however might be that people would keep their older cars longer in order to qualify for the incentive, as opposed to upgrading it sooner, which would delay some new car purchases and upgrades to more fuel-efficient vehicles.

    Maybe another caveat they could add is that all new cars must meet a certain MPG threshold (ie: all new cars bought must average at least 20 MPG), and maybe an additional $1k if they are hybrid vehicles.

  • Samie

    I still wonder if I’m selling a 1988 Ford Escort for say $300 why would I not ask for more if I knew that I could get the 4K now or say in a year or two? Is there a way to make the rebate not count towards the total value of the car? If not again what about teens or lower income people who may not be able to afford a used car or those who have bad credit not being able to buy a new car?

    Oh another thing mobility a question that AP brought up. While I agree reducing impacts on oil and sprawl are good I don’t agree with restricting someones mobility in where they work, or where their home is, not everyone can live in the city send there kids to private school and pay large $s in property tax. Some urban sprawl is the result of poor planing/zoning, city codes superseded by state laws and political influences. Better mixed zoning/mixed communities preservation of farmland and wildlife areas w/ more impact fees on extremely dense or higher end dwellings/& reducing the desire for large densities of workforce housing & HUD structures in a concentrated area could go far and doesn’t restrict economic activity as much or putting higher constraints on those who don’t have disposable incomes that fall into those pay day schemes or crime.

    As for a Dodge Viper what a joke v10 v12 right why should we encourage auto manufactures to develop these type of vehicles ok maybe if you live in Montana but no need for this type of car in most states! One should pay by paying more for these type of cars not letting someone sit on it actually receive more of a gas tax rebate by only driving 1k a year while someone in a Prius drives 10-20k a year seems silly. As for bureaucratic regulations it is easier to work with a hand full of auto manufactures as opposed to maybe say 40 million taxpayers who drive!

  • Lost Prius to wife

    AP, you have stated before, and I agree with you, that we do need an energy policy that does not require the government taxing us more or driving up the national debt, but relies on profitable methods to solve the issues. Having agreed with that, in a recession / depression economy it becomes difficult to find and/or apply profitable methods such that the people, in general, will “buy” into it (both figuratively and literally). You are right about the difficulties of tax incentives, penalties, etc. being based on vehicle purchase rather than vehicle usage.

    Although taxing gas is the government taxing us more, it probably is the right and/or best way to go first. This will force less usage of cars, help save fuel resources, promote living closer to work, stimulate forms of mass transit, and add incentive to buy fuel efficient/alternative cars. Right now in Colorado, the state government is considering raising the state taxes on gas. This money is mostly designated for road and bridge repair. This will hopefully help to start decreasing the state’s unemployment along with increasing the fore mentioned affects. Unfortunately, taxes like that tend to hurt the poorest people the most, not the richest.

    Buying incentives tend to favor the poorer people more than the rich. The people that have a million in their savings, and $100K in their checking, are not going to worry whether or not there is a $4500 credit when they buy a car (although they will probable use it). But for poor people it may make the difference between buying a new car or not. It is the new products “off the shelves”, and not just cars, that stimulate the economy the most.

    Personally, AP, I hope the $4500 incentive does help you keep your job. The last thing we all need is more people out of a job.

  • Samie

    What?????
    Oh increase in fed? gas tax to cover reduction in revenue from reducing fed income tax or for repair infrastructure, or for a revenue neutral plan to reduce fuel consumption? not sure whats going on in some of these comments……

    Maybe I should get off that (maybe there is a full moon or something) but as for the cash for clunkers program I may need to do some research on this… great idea as long as there is no distributional problems or the likelyhood of scamers that can be common in the used car world.

  • Ross Nicholson

    Subsidize high miles/gallon cars? Yes we can.
    Penalize low miles/gallon cars? Of course, yes we can. Opportunity costs for keeping them running instead of crushing them count.
    Finance brilliant new zero-emissions vehicles? Sure, yes we can.
    Put teeth in gas guzzler taxes? Yes we can.

  • Matt Crook

    This seems to be one of those ideas that seems great in the begining, but when closely analyzed is really more hype than actual results.

    Consider the following: (some may be repeats from above)
    1. Older cars are typically driven by those who can’t afford newer cars.
    2. Cars wear out, and these cars are already at the end of their useful life at which point they will be scrapped anyway–for free.
    3. People who do a lot of driving are going to be more interested in cars that get good gas milieage than people who do not drive as much. In other words, most people driving old gas guzzelers typically don’t drive much.
    4. This program could have the wrong results sometimes. (I can just see the article now on CNN.com –”Man cashes in on old Honda Civic, uses the money to buy a Hummer”)
    5. For every 10 people who get “Cash for Clunkers” probably 9 of them were already planning on buying a new car regardless. So you just gave 10 people $4500 each just to get that one extra car sale. Since people who buy new cars don’t drive clunkers, they probably each went and found a old car on it’s last leg and turned it in for the cash. The old car on it’s last leg may have been headed for the trash anyway.

    Let’s spend this kind of money on research! Not on a silly program that may produce great meaninless numbers. I’m thinking the 1-2 Billion anually on this program could go a long way to developing a cheaper, lighter, more power dense, longer lasting hybrid/EV car battery.

  • moishe k

    1) NYC is doing the right thing, with yellow cabs but not with regular car service.we need that done nationwide

    2) who spends more time daily on the road taxis or “clunckers”

    3)limiting the program to taxis, will limit abuse

  • Lost Prius to wife

    Matt Crook, you are right in part with your comments. The money cannot be just “given” out for a “clunker”, especially in the form of straight cash. Strings need to be attached to the turning in of a “clunker” (trust me when I say one man’s “clunker” is another man’s “treasure”).

    The reason for the thought of “Cash for Clunkers” is to stimulate the economy. Although selling parts for older cars does create jobs, there are a lot more parts, more diverse parts, R&D, and manufacturing that go into the making of a new car. Hence, more jobs.

    Working against the buying of new cars are articles in CNN, MSN, etc. that talk about the buying of a good used car so one does not have to “pay” for the initial depreciation. This is the “cheapest” way to buy a car, but does not stimulate the economy much. The next “cheapest” way to buy a car according to these articles is to buy a new car and drive it “into the ground”. This also does not stimulate the economy much since the car has only one owner instead of two, three or more until it finally becomes a “clunker”.

    Therefore, the only real way to stimulate the sale of new cars is to “eliminate” some of the supply of used cars available to buyers. Hence, “Cash for Clunkers”. But it cannot be out right cash. It has to be in the form of a credit or incentive to buy a new car. In other words, the initial depreciation to the first buyer of the car, a “barrier” to buying a new car, is being paid down to make the car affordable. And the only people that get that credit or incentive should be the people that are buying the new cars and helping stimulate the economy. The credit or incentive should not go to just anyone that turns in their “clunker”. That would be very flawed thinking.

  • AP

    Samie, I probably didn’t explain it very well, but I wasn’t suggesting someone would buy a Viper to get a tax credit. The income tax credit I am talking about, funded by a higher gasoline tax, would be distributed *equally* to every income tax filer anyway, whether they even own a vehicle or not, or even owe income tax or not.

    This makes it simple, easy, transparent, and fair. A conservative may complain that people who pay no income tax shouldn’t get an income tax credit, but the income tax system – the IRS – is only the means of returning the money. Face it, low-income people who don’t pay income tax probably buy gas, and deserve the credit. If they don’t buy gas, that is to be encouraged. I say that even though I’m about as big a car enthusiast as there is. After all, if more people take public transit or car pool, there’s more room on the road for me!

    The Viper owner I am referring to would be more of a hobbyist, who might take the car to the track a few times a year to thrash it. His total pollution “footprint” would be minimal, so why charge him a gas guzzler tax.

    Samie, I’d dispute that the gas guzzler tax has worked. I think the goal should be to reduce fuel consumption as a country. “Gas guzzling” cars count in the overall CAFE numbers for a manufacturer anyway, so when they build one Viper, they need to make about 10 Neons to make up for it. Overall, there is really no effect. I think it’s all to look good to “the political base.”

    Personally, I’d prefer a light hobby car than a Viper, but if they’re not hurting anything, why penalize them? Besides, technologies on many “unnecessary” cars like Porsches, Corvettes, Ferraris, etc. find their way into more mainstream cars, some of which help fuel economy.

    The over-riding concern here should be what will get *real* results. Changing bahavior with this kind of fuel tax would have a much quicker and longer-lasting effect than any other measures, with less cost.

  • Bryce

    This would be a great deal for me. 3000-4000 off the purchase of a Volt or similar electric vehicle coupled with the 7500 already allocated towards it, and I save over $10-12k. Sounds pretty sweet to me.

    35k-12k=23k=beautiful

    I do want to emphasize that this is an incentive, and no one should get it in their heads that all old vehicles, some of which are absolutely beautiful, are going to be scrapped.

  • Lost Prius to wife

    Bryce, what you have expounded is exactly what I am talking about. At $35K, the Chevy Volt may be out of your and many others price range, or at least require some serious family budget constraints. This means more replacement parts are sold for keeping up the older lower gas mileage cars. Along with this is the fact that less gas saving Chevy Volts are sold and less Chevy employees are needed to build them.

    But at $23K, it sounds like you would be fighting with many more people to be the first in line to get your Chevy Volt!

    That would require many more Chevy employees to build them to meet the demand. And more supplier parts to make them. This also means that there are more used cars for others to choose from, rather than buy a new car. By resorting to “Cash for Clunkers”, this keeps the amount of used cars to what exist now or less. This may be enough of a “nudge” for some people to choose a new car rather than a used car since what they need or want does not exist.

    Since manufacturer’s fleet mileage is increasing (albeit slowly), the buying of a new car means less gas usage both foreign and domestic. This is the right direction to go.

  • RKRB

    -Here’s a system, based on one used in Japan, which would seem far better than the proposal:

    ** Make vehicle registration and use fees retrograde (that is, older cars would pay significantly more in annual fees than newer ones). **

    The current system has powerful financial disincentives to buy a new car. As an example, when we purchased our new ’06 hybrid to replace our 10 year old gas hog, we paid over $2200 up front in sales tax and kissed the money goodbye. We immediately noticed over $300 more per year in state vehicle registration fees (which will continue for several years), and our annual insurance costs jumped about $600. When you consider the gas hog was worth about $3500, and running pretty well, a $4500 discount is no incentive. Depreciation is another huge consideration when buying a new car. When I look at the huge cost to buy a new vehicle, in addition to the purchase price, it looks like our other old car is going to stay around for a while longer (and get replaced by a hybrid eventually). The $4500 proposal would also only benefit a few people, who may not actually need it, as others have pointed out. Oh, and by the way, our current city government relies heavily on the sales tax, and that’s bad, because tax revenues are way down this year.

    The Japanese system has worked pretty well at getting rid of older polluters and stimulating new sales, and people are surviving over there. Those who cannot afford newer cars could be given some kind of legitimate and flexible subsidy.

    I’d say go for a system that has been proven effective.

  • Heltea frannetta

    This is not logical.

    Most states have to take there cars in for emmissions tests.

    That means the old cars dont really polute much more than a new car.

    The raw materical processing harms the enviroment much more than keep in a old car that is kept in good condition.

    To poduce a new car uses so much energy vs keeping your old car.

    The old car will actually save the envrioment.. Not the economy however.

    They are brain washing peopel to think a new car will help the air quality so they help car sales.

    Germany is like this they have a lot of laws about old cars.

  • Anonymous

    4500 is a decent junk of change. no one said youd have to buy a 15000 car. There are new cars that sell below 11k brand new. And im pretty sure someone driving a “pos” could afford 11k-4500….not to mention the junker they drive probably gets 8-15mpg where as a fuel efficient economy car would average about 25mpg and have working ac/heater/windows/lights/wipers etc (all common things that dont work on junkers that pollute the roads everyday)

  • Need2Change

    Well, I’m the prime target for this program. Fouryears ago, I bought a one year old used Chrysler. I had a 1993 Eagle Vision with 152K. I was offered $300 trade in. I kept the car and now have an extra car. I only have liability insurance on it and call it my commuter car — which it is. So, I actually save on insurance since my newer car is used for pleasure only and averages about 7K/year. The Eagle now has over 200K.

    It’s about time to replace my wife’s 1999 Nissan Maxima. I might keep it if I can’t get much for a trade in.

    A program like this would encourage me to retire the Eagle, and maybe later on the Maxima.

  • Need2Change

    I would hope that the cash amount is not fixed. An older car or guzzler would learn the max. However, a 1999 Honda Accord probably should receive one-half the cash, and 1999 Honda Civic should only receive one-quarter.

    This pro=gram should not encourage the destruction of fuel efficient or, green vehicles. So there should be sub-$2K cars available–and all will be fuel efficient.

  • veek

    We lived in Germany several years ago and they had another way to get older, poorly maintained, dangerous polluters off the road. It was called the TUV inspection.

    To keep your car licensed, you would need a periodic roadworthiness inspection, done by a licensed engineer (yes, an engineer) in a central facility (not just your corner garage), and the inspection would take several days. The car could fail for hundreds of predetermined reasons, among them pollution, unrepaired surface rust, or a poorly adjusted emergency brake. They were serious, and there was no appealing the decision — if they said the car needed a repair, you either repaired it or the car wasn’t registered. Needless to say, owners of older cars really sweated it out, and the required repairs were often so expensive and time-consuming that a newer car was the best solution. The only old oil-burning clunkers you saw were ones that NATO servicemen would buy (they were exempt from the inspection). This kind of solution could be adapted to pollution laws, too.

    Such an inspection would be another good way to make owning an old polluter less economically viable, and it could also generate inspection fees. Sounds pretty Draconian, and of course in Germany driving was considered more of a privilege than an entitlement, so it may not work here (Germany also had some drunk-driving restrictions that would never get past the ACLU in the US), but it is interesting to see how other countries do this.

  • Need2Change

    I don’t want a road worthiness inspection that requires an engineer. It could costa lot.

    Also to ensure that there are economical cars for sale, i.e. cost less than $4,000, the government could require that one own the car for two or more years before one is eligible for the credit. That way people won’t be buying cars just forthe credit. It wouldn’t make sense to buy a car for $2K, insure, license, inspect, maintain, and park it just to get a $4K tax credit years later.

  • timrock

    Duh!

  • marco

    Hi

    Here in Portugal we have this incentive for quite a long.

    The deduction will go up to 2500 euros depending of the vehicle age, always at least 10 years old. And you should own the car for at least 1 year.

    The tax credit is deducted on the tax paid for a new car, if it complies with latest euro emission standarts. For example a city car never pays enought tax to take advantage, but a compact
    Usually is worth it.
    The old car is always recycled on approved locations.

    Here it is a strong incentive to change the old car for a new one safer and cleaner.

  • moishe k

    Ok why don’t we enforce NY City taxi rules nationwide

  • Hank

    Hi, I for one drive a 30 year old Toyota Celica because I don’t like new cars, or monthly payments. My car has been all renewed by me while still driven every day, 5 years, less then 5 grand. It gets better milage then most new cars and would still pass emissions. I average 25,000 miles a year, and don’t break down, why would I want to give it up, or have to pay more because it’s old. Iam 54 years old myself should I have to pay more because Iam older?

  • Helen

    I did a quick back-of-the-envelope calculation on how much energy would be used in creating the new car. Is it really efficient to exchange an old car for a new one with slightly higher mileage? Check my math, and let me know what you think.

    http://www.affinefinancial.com/2009/02/03/tax-dollars-to-crush-cars/

  • Bryce

    none of this matters anyways, the provision in the bill failed….no go.

  • Anonymous

    I say crush the hybrids and get these disgraceful cars off the road. Who cares about the environment and the hoax of global warming?

  • Josh Paul

    you stupid Hippies, what about us collectors? you people say new cars are the awnser? haha thats BS, they are plastic peices of crap, i will NOT buy a new car,
    you people need to go back to chaining yourselfs to trees and leave the cars alone