Senator Schumer on Cash For Clunkers

Congress Officially Passed National "Cash for Clunkers Plan" Giving NY Drivers $4,500 Cash if they Swap Old, Inefficient Cars for Newer, Fuel Efficient Models

June 19, 2009 -- U.S. Senator Charles E. Schumer is today calling on all New Yorkers to take advantage of the “Cash for Clunkers” program approved by the Senate last night. The program allows Upstate New York drivers to trade in their older, less fuel efficient cars, trucks and SUVs for more fuel efficient vehicles.

Schumer said that New York City drivers can save up to $4,500 cash on the purchase of a new car but they need to move fast because funding for the program is limited and vouchers are given out on a first come, first serve basis. Schumer released a report earlier this year showing that 280,000 cars on the road in Upstate New York would qualify for the “Cash for Clunkers” program.

"This is a great program that will help remove thousands of gas-guzzling, polluting cars, trucks and SUVs from Upstate New York highways and roadways and replace them with better, more fuel efficient vehicles,” said Schumer. “This is a smart investment in our nation’s economic and environmental future that will also help jumpstart the struggling car industry. New York drivers must move fast to take advantage of it.”

The legislation, passed in the Senate last night as part of the FY 2010 Supplemental Bill, would accelerate the removal of the most inefficient cars, trucks and SUVs from the road today and promote the purchase of more efficient vehicles. Under the program consumers may trade in their older vehicles and receive vouchers worth up to $4,500 toward the purchase or qualified lease of a new, more fuel-efficient car or truck. The program will be authorized from July 1, 2009 to November 1, 2009 with $1 billion in emergency funding. Schumer is urging New Yorkers who want to upgrade to a new and more fuel efficient car to act quickly, before the funding runs out.

Schumer was an original co-sponsor on the original Cash for Clunkers bill, introduced in January. President Obama subsequently endorsed the program, and both the Senate and the House incorporated a version of the program into the FY 2010 Supplemental spending bill. The bill passed the House earlier in the week and the Senate last night.

The Cash for Clunkers program that passed the House and Senate breaks down as follows:

· The trade-in vehicles must be in drivable condition; be continuously insured and registered to the same owner for at least one year; have a combined fuel economy value of 18 mpg or less (Work trucks must be pre-2002 regardless of mpg). The value of the voucher depends on the class, age, and fuel economy of the vehicle, and the new vehicle must have a manufacturer's suggested retail price of less than $45,000.

· When intending to purchase a new passenger car, the older vehicle must get 18 mpg or less. New passenger cars with mileage of at least 22 mpg are eligible for vouchers. If the mileage of the new car is at least 4 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new car is at least 10 mpg higher than the old vehicle, the voucher will be worth $4,500.

· When purchasing a new small truck, the old vehicle must get 18 mpg or less. New small trucks or SUVs with mileage of at least 18 mpg are eligible for vouchers. If the mileage of the new truck or SUV is at least 2 mpg higher than the old vehicle, the voucher will be worth $3,500. If the mileage of the new truck or SUV is at least 5 mpg higher than the old vehicle, the voucher will be worth $4,500.

· When purchasing a new light-duty truck, The old vehicle must get 18 mpg or less. New large trucks (pick-ups and vans weighing between 6,000 and 8,500 pounds) with mileage of at least 15 mpg are eligible for vouchers. If the mileage of the new truck is at least 1 mpg higher than the old truck, the voucher will be worth $3,500. If the mileage of the new truck is at least 2 mpg higher than the old truck, the voucher will be worth $4,500.

· Under the Cash for Clunkers Program, consumers can also trade in a pre-2002 work truck (defined as a pick-up truck or cargo van weighing from 8,500-10,000 pounds) and receive a voucher worth $3,500 for a new work truck in the same or smaller weight class. Only 7.5 percent of the total funds can be used for vouchers for the purchase or lease of a work truck. There are no EPA mileage measures for these trucks; however, because newer models are cleaner than older models, the age requirement ensures that the trade will improve environmental quality. Consumers can also “trade down,” receiving a $3,500 voucher for trading in an older work truck and purchasing a pick-up or van weighing between 6,000-8,500 lbs.

By trading in a car that gets a maximum of 18 miles per gallon for a more fuel efficient car that gets 35 miles per gallon, the average Upstate New York family would save $1,140 a year in fuel expenses and $5,720 over five years.

Senator Schumer said today that he believes the Cash for Clunkers program will help jumpstart demand for cars in an industry that has suffered throughout the economic downturn. While the Schumer bill does not require that cars purchased with vouchers be manufactured in the United States or made by U.S. companies, many of the qualifying models are manufactured in the United States. According to the ACEEE, similar program instituted in Germany increased demand for automobiles by as much as 20 percent.

In Upstate New York there approximately 280,000 cars that likely qualify for the program.

Here is how the numbers break down across the state:

· There are approximately 35,800 cars on the road in the Capital Region that would qualify for the Cash for Clunkers program.
· There are approximately 32,200 cars on the road in the Central New York that would qualify for the Cash for Clunkers program.
· There are approximately 85,900 cars on the road in the Hudson Valley that would qualify for the Cash for Clunkers program.
· There are approximately 17,500 cars on the road in the North Country that would qualify for the Cash for Clunkers program.
· There are approximately 39,500 cars on the road in the Rochester-Finger Lakes Region that would qualify for the Cash for Clunkers program.
· There are approximately 21,800 cars on the road in the Southern Tier that would qualify for the Cash for Clunkers program.
· There are approximately 48,400 cars on the road in the Western New York that would qualify for the Cash for Clunkers program.

Sharp fluctuations in gas prices and tight household budgets are causing many consumers to rethink their vehicle preferences, while automakers are paying more attention to the fuel economy of their offerings than they have before. The federal Corporate Average Fuel Economy (CAFE) standards have recently been raised requiring that average new car and light truck fuel economy increases by at least 40 percent to 35 miles per gallon or more by 2020. The benefit of increases in fuel economy will not be realized for many years unless measures are implemented to incentivize the purchase of a fuel efficient car.

Schumer added, “Investing in efficient cars today will result in a smarter, cleaner environment tomorrow.”

Source: Senator Charles E. Schumer