Vehicle Scrappage Program Needs Repair

May 6, 2009 -- Washington, D.C. -- House Energy and Commerce Committee Democrats have announced agreement on a vehicle scrappage program that would offer vouchers of $3,500 or $4,500 for consumers to retire their vehicles and purchase new ones. Unlike the scrappage bill introduced in January, which aims to accelerate the modernization of the U.S. fleet to a more fuel-efficient one, the program just announced aims primarily to clear Detroit’s unsold inventory from the storage lots.

While a vehicle to be purchased under the new program would be required in most cases to meet a fuel economy threshold, the thresholds are low. A standard pickup could qualify with a sticker value of only 15 miles per gallon, well below the current corporate average fuel economy standard for trucks. “I can’t see using taxpayer dollars to sell a Hummer H3T,” said ACEEE Transportation Program Director Therese Langer. “We would welcome incentives to retire gas guzzlers and encourage the purchase of efficient vehicles, but the proposal just isn’t there yet.”

“Federal incentives should promote vehicles with above-average fuel economy, at a minimum, so that American consumers are better prepared for the higher gasoline prices that are likely to return once the current recession ends,” said ACEEE Executive Director Steven Nadel. “We encourage the full House and the Senate to tighten up the criteria for this program so as to further U.S. energy goals while helping to stimulate auto sales.”

Source: ACEEE