Stabenow, Harkin push amendment that would spur demand for fuel-efficient American cars
Legislation would give new car buyers of modest income a $10,000 credit if they trade in an older vehicle
WASHINGTON – Senators Debbie Stabenow (D-MI) and Tom Harkin (D-IA) announced that they plan to introduce an amendment to the Senate stimulus package tonight that would help American automakers sell their cars, while also taking older, less fuel-efficient cars off the road. The Sell Fuel Efficient Cars Amendment would provide a rebate of $10,000 to buyers who trade in a car more than ten years old for a new car assembled in the United States.
“With U.S. auto sales at a 25-year low, we must provide incentives encouraging consumers to purchase vehicles. When people are able to buy a new car, we keep American workers on the job,” said Stabenow. “Not only will this amendment spur new domestic auto sales, but it will get older, less fuel-efficient vehicles off the road and reduce greenhouse gas emissions.”
“The auto industry supports one out of every 10 jobs in this country, and so let’s be frank - as the automobile industry goes, so goes the U.S. economy. We are not going to have a strong economic recovery in our country without a strong recovery in the automobile industry,” said Harkin. “This amendment is not another bailout and it is not another handout. Autoworkers want nothing more than to be back on the job full-time, producing high-quality cars that Americans want to buy. This amendment will help make that happen by giving Americans robust incentives to buy new cars and trucks now, despite the steep economic downturn.”
Eligibility for the rebate would be limited to households with an adjusted gross income below $75,000 on their prior year’s income tax return, or individuals with an adjusted gross income under $50,000. There would be a one-car limit per individual or family.
Those who are eligible would be required to trade in a car that is over 10 years old and still operational. The rebate must be used to purchase a new, fuel-efficient car or truck assembled in the United States. The new vehicle must have an average fuel economy above 25 miles per gallon for a car and 20 miles per gallon for a truck measured under the stricter five cycle EPA standard; and more than five miles per gallon better than the trade-in. The trade-in vehicle would be destroyed.
The amendment provides $16 billion, which would cover more than 1.5 million purchases. The program would end once the funds ran out, but no later than September 30, 2010.