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BREAKING: Cash for Clunkers Passed By Senate

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1994 Buick Park Avenue, by Flickr user Rienk Mebius

1994 Buick Park Avenue, by Flickr user Rienk Mebius

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All that's left now is for President Barack Obama to sign the bill. Late last night, the US Senate voted 91 to 5 to pass a $106 billion supplemental spending bill for US troops in Iraq and Afghanistan that includes $1 billion in "Cash for Clunkers" funding.

Earlier, the Senate had barely defeated an attempt by Senator Judd Gregg (R-NH) to remove the clunkers portion of the bill. The vote was 60 to 36, the bare minimum, and votes were largely aligned by party: Democrats for, Republicans against.

The president is expected to sign the bill within a week; it will take effect one month after that date. The $1 billion would pay for about three and a half months' worth of tax credits, through November 1.

The program would offer electronic vouchers of up to $4,500 to buyers of new cars that get mileage of at least 10 miles per gallon more than the vehicle traded in, which must have an EPA mileage rating of 18 mpg or less. The minimum voucher is $3,500, for a new car that gets at least 22 mpg.

New sport-utilities, pickup trucks, and minivans must get at least 2 mpg more than the vehicle being replaced, which must have been rated at 18 mpg or less, to get a $3,500 voucher. The difference must be at least 5 mpg to get the maximum $4,500 voucher.

Eligible ehicles were made between 1984 and 2001. Dealers must ensure that the engine and transmission are crushed or shredded but, mollifying car collector groups, the entire vehicle need not be destroyed. The voucher program will be run by the Transportation Department.

IS YOUR CAR ELIGIBLE? Check Edmunds' list of models considered to be clunkers.

The House had passed its bill, launched by Rep. Betty Sutton (D-OH), 226 to 202 on June 9, more than a month after House members agreed on the terms of the bill. The House and Senate agreed on terms for a final bill within days; last night's vote came exactly one week later.

Advocates are likely to propose funding the remaining $3 billion of the program originally proposed. Some legislators favored a competing bill, with higher MPG requirements, from Senator Diane Feinstein (D-CA).

The $1 billion of funding is expected to lead to the sale of 150,000 new cars, an aide for Rep. Sutton told Automobile News.  Unclear for now is how many of those sales would not have taken place without the tax credits.

The clunkers bill has been supported by automakers, most individual dealers, and the National Auto Dealers Association. Similar programs in Germany, France, and China have increased vehicle sales up to 30 percent.

Pile of junk cars

Pile of junk cars

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[Automotive News, subscription required; Detroit News; 1994 Buick Park Avenue photo by Flickr user Rienk Mebius]

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Comments (5)
  1. I don't qualify because my car already gets good gas mileage. My dad swears by the car buying process here: http://excarsalesman.typepad.com/ It is kind of similar.
     
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  2. Most cars that are currently donated to charity will now be eligible for a voucher under the cash for clunkers program. Since the tax deduction for donating a car is only $500 or what the car sells charities won't be able to compete. Why not change the amount a person can deduct for donating their car back to the book value. That way the government doesn't have to spend $4 billion of our dollars giving away vouchers and trying to administer a program that is way too convoluted!
     
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  3. But it's a good way to dispose your old car in an eco-friendly way.
     
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  4. I didn't know about it before. I don't want to go for voucher as my SUV is good and I am happy.
     
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  5. The new bill is very much appreciated. It could provide great benefits to the car owners and the industries. This bill may supplement to the goals of the towing industries and the like in disposing all clunkers dumped elsewhere. This site may provide help in achieving this bill's prime goal junkcardisposalmarkham.com .
     
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