New scrappage bill introduced in House

Chrissie Thompson
Automotive News
March 18, 2009 - 12:41 pm ET

A bill introduced yesterday in the U.S. House of Representatives would give consumers between $3,000 and $5,000 through the 2011 fiscal year if they turn in aging vehicles in favor of more energy-efficient transportation options.

The bill, written by Rep. Betty Sutton, D-Ohio, would give vouchers for buying new vehicles or using mass transportation in exchange for scrapping vehicles that are at least eight years old. The vehicles purchased would have to be from the 2009 model year or later and have better gas mileage than the car scrapped. Cars also would have to achieve at least 27 mpg on highways, and light trucks would have to achieve 24 mpg. More fuel-efficient cars and those assembled in the U.S. would qualify for higher voucher amounts.

The bill is the third scrappage incentive proposed in Congress this year.

The measure is supported by the Detroit 3 and the UAW, but as was the case with the first two bills, the Alliance of Automobile Manufacturers doesn't support it as written. Its opposition stems from unequal treatment of automakers, a spokesman Charles Territo said.

The bill's introduction comes a month after Germany's new-car sales jumped 21.6 percent. In February, Germany instituted a voucher worth 2,500 euros, or about $3,260, for scrapping vehicles more than nine years old.

Last month new-car sales in western Europe declined 17.7 percent from February 2008, according to J.D. Power and Associates.

Sutton's bill would give a $3,000 voucher for using mass transit, up to $4,000 for buying vehicles assembled outside North America and up to $5,000 for buying vehicles assembled inside North America or any registered work vehicle. Qualifying vehicles would require a suggested manufacturer's price of $35,000 or less.

Starting with the 2011 model year, the bill also would allow consumers to receive a $7,500 cash voucher for purchasing a plug-in electric hybrid that gets at least 100 mpg.

Harry Stoffer contributed to this report