SEMA eNews Vol. 12, No. 21, May 28, 2009

Senate "Clunker" Bill Includes SEMA Safeguard for Older Cars and Trucks

Legislation introduced in the U.S. Senate to establish a one-year national vehicle scrappage program includes a SEMA provision to prevent cars that are 25 years or older from being crushed. The bill was introduced by Sen. Debbie Stabenow (D-MI) and Sen. Sam Brownback (R-KS) and is otherwise identical to legislation recently approved by the House Energy Committee by a 50-4 vote.

Under the so-called "cash for clunkers" program, consumers who buy a qualifying new car would receive a voucher credit in exchange for scrapping a trade-in car that gets less than 18 mpg (15 mpg for heavy pickups and vans). Under the SEMA provision however, the trade-in car or truck must be less than 25 years old. Senators Stabenow and Brownback included the stipulation to help safeguard vehicles that may possess “historic or aesthetic value” and are irreplaceable to hobbyists as a source of restoration parts.

The car buyer would receive a $3,500 voucher if they bought a new passenger car that was at least 4 mpg higher than the older vehicle or a new pickup truck/SUV that was at least 2 mpg higher than the old truck. They would receive $4,500 if the passenger car was at least 10 mpg higher and the truck/SUV was at least 5 mpg higher. The program would mandate that the engine block and drivetrain be destroyed.

Many lawmakers view a vehicle scrappage program as a mechanism to stimulate auto sales and reduce excess dealership inventory. While still promoting better ways to spur sales and clean the environment, SEMA is also seeking to mitigate the potential unintended consequences and damage a scrappage program might have on the automotive aftermarket.

The Senate will likely consider the vehicle scrappage legislation in early June. SEMA will continue to work to ensure that the 25-year provision remains in any bill enacted into law.

For additional information, contact Stuart Gosswein.

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