Cash for clunkers a lemon? - Denver Business Journal:

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“This will disappoint a lot of consumers,” said Analyst John Wolkonowicszof “So few vehicles are President Barack Obama signed the Consume r Assistance to Recycle and Save program June 24, whicbh will provide car buyers a credit of as much as $4,500 toward new car purchases. However, as industryt observers examinethe program, they’re concluding it won’rt boost auto sales by the 1 millio n vehicles that was projected. U.S. automotiver sales are on pace to reach betweeh 9 million and 10 million potentially the worst sales yearsince 1979. Germany, France and the Uniteed Kingdom have fleetmodernization programs.
Germany’s prograj boosted auto sales by 40 percent in May versus ayear ago, accordingt to the . The projections for the U.S. are more Wolkonowicz said the $1 billion initial window for the progranm could fund upto 250,000 vehicles purchases, but he doesn’t see that pool of funds beintg depleted in the allotted time frame withouty some rule changes, let alons the approval of three more $1 billion roundw of spending that have been Analyst Jessica Caldwell, of Edmunds.cojm Inc., said it will be a struggle to reacn 250,000 vehicles in four months. “For the people it applies to, considert yourself lucky,” she said.
“The major problem is that it’ss restrictive and complicated. For the average it’s overwhelming.” The program will discount qualifying new-car purchases by either $3,500 or $4,500, depending on fuel efficiency improvements. Eligible vehicles for trade-imn would have to be less than 25 yearss old and insured and registered for at leasa year. Cars have to have a combinef fuel economy rating of 18 miles per gallon or The buyer would geta $3,5000 credit if the new vehicle gets between 4 and 9 mileas per gallon more than the trade-imn and the full $4,500 credit if the new vehiclw gets at least 10 miles more per gallon.
Mile-per-gallonm parameters for trucks areslightlgy lower, and work trucks weighing more than 8,5009 pounds and older than 2001 would be eligiblw for a $3,500 credit. Though the creditt would be considered cash fromthe buyer’s consumers will not touch the money. Dealers will get an electronic reimbursement from the government for the according to informationfrom Congress. Dealers will need to registerd forthe program. The government will establish a proceduree for doing so within 30 daysof Obama’se signing. A scrapping enforcement procesds also will be The program may sound good on but analysts say surprises abound for consumersof foreign-madew and some domestic vehicles.
The restrictivew program is bad news for anyone hoping to cash in a 1985Hondaq Accord, for instance. Despite that vehicle’xs 24-year-old age and the likelihood that its time on Earthy is nearan end, its EPA miles-per-gallon estimatre exceeds 20, which makes it ineligible for a trade-ibn voucher. Furthermore, popular models such as the Hondaq Accord and Civic and the Toyotas Camry and Corolla do not qualifg forthe credit, regardless of the ages, because they’re too fuel-efficient. said it anticipates few Hondas traded in under the programm because it is based onfuel economy.
According to EPA the Pilot and Passport sport utility vehiclew and Ridgeline pickup trucks woulrd be the only Honda vehicles to Owners of larger domestic cars from the past five years maybe too. The fuel efficiency standards will doom even some cars perceivex asgas guzzlers, such as the Ford Crown Victoriwa and the Mercury Grand Marquis built in 2005 or “That’s a full-size, rear-wheel drive, with a V8 and it doesn’tg qualify,” Wolkonowicz said. And cars? Forget about gettingt a credit to downsize from that 2004 Cadillacv DeVille into a Chevy Other issues arise with thevoucher itself.