On July 27, 2009 the so-called $1 billion “cash for clunkers” program in the U.S. was officially fired up. It’s now running on all cylinders and heading down the highway in top gear.
However, the Cash for Clunkers program has been a victim of its own success. Less than six days after is implementation last Friday it has been suspended for lack of funds.
According to various sources, in just six days over 25,000 vehicles were approved for the credit. But over 225,000 vehicles have been registered since the announcement of the program a few weeks ago and are still awaiting approval.
If all these requests are accepted, and until now Cash for Clunkers has had a rejection rate below 1 percent, the total of 1 billion US dollars allotted to the program will already have been used up. Government officials will nevertheless try to find additional funds before Parliament is adjourned for August.
Canadian officials are looking on with interest. But their keys and wallets are still in their pockets. Before we look at what’s holding them back, let’s take a look at that U.S. program.
U.S. to spend $1 billion
First off, “Cash for Clunkers” is the unofficial name. Its official one is the Car Allowance Rebate Systems, or CARS, which you can find on the Internet at www.cars.gov.
Essential elements of the CARS plan are:
• Owners of vehicles considered to be polluters and/or gas guzzlers can trade their vehicles in for government rebates of $3,500 to $4,500, for the purchase of new, cleaner and more fuel-efficient vehicles.
• Generally, trade-in vehicles have to have fuel efficiency ratings worse than 18 mpg (combined highway/city), and must be registered and insured continuously by the current owner for one full year proceeding the trade-in.
• Trade-in vehicles cannot be older than 25 years.
• New vehicles purchased cannot exceed $45,000 and must meet minimum fuel economy standards (22 mpg for passenger cars, 18 mpg for category 1 trucks, 15 mpg for category 2 trucks).
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However, the Cash for Clunkers program has been a victim of its own success. Less than six days after is implementation last Friday it has been suspended for lack of funds.
According to various sources, in just six days over 25,000 vehicles were approved for the credit. But over 225,000 vehicles have been registered since the announcement of the program a few weeks ago and are still awaiting approval.
If all these requests are accepted, and until now Cash for Clunkers has had a rejection rate below 1 percent, the total of 1 billion US dollars allotted to the program will already have been used up. Government officials will nevertheless try to find additional funds before Parliament is adjourned for August.
Canadian officials are looking on with interest. But their keys and wallets are still in their pockets. Before we look at what’s holding them back, let’s take a look at that U.S. program.
U.S. to spend $1 billion
First off, “Cash for Clunkers” is the unofficial name. Its official one is the Car Allowance Rebate Systems, or CARS, which you can find on the Internet at www.cars.gov.
Essential elements of the CARS plan are:
• Owners of vehicles considered to be polluters and/or gas guzzlers can trade their vehicles in for government rebates of $3,500 to $4,500, for the purchase of new, cleaner and more fuel-efficient vehicles.
• Generally, trade-in vehicles have to have fuel efficiency ratings worse than 18 mpg (combined highway/city), and must be registered and insured continuously by the current owner for one full year proceeding the trade-in.
• Trade-in vehicles cannot be older than 25 years.
• New vehicles purchased cannot exceed $45,000 and must meet minimum fuel economy standards (22 mpg for passenger cars, 18 mpg for category 1 trucks, 15 mpg for category 2 trucks).
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