SEMA eNews Vol. 12, No. 30, July 30, 2009

Short-Term Cash for Clunkers Program Launched

The $1 billion vehicle scrappage program authorized under the “Consumer Assistance to Recycle and Save Act” (CARS) began on July 24. The National Highway Traffic Safety Administration (NHTSA) issued a rule on how the program will operate. Although it proved impossible to stop, SEMA worked with lawmakers to minimize the harm the program would needlessly impose on thousands of independent repair shops, auto restorers, customizers and hobbyists across the country. SEMA persuaded Congress to spare cars 25-years and older from the scrappage heap and expand parts recycling opportunities under the new law.  

Consumers will receive a $3,500 voucher if they buy a new passenger car that was rated at 4 mpg higher than the older vehicle, or a new pickup/SUV that was at least 2 mpg higher than the old truck (1 mpg for heavy-duty trucks/vans). They will receive a $4,500 if the passenger car was at least 10 mpg higher and the truck/SUV was at least 5 mpg higher (2 mpg for heavy-duty trucks/vans). The new vehicle must have a manufacturer's suggested retail price of less than $45,000.

Lawmakers authorized $1 billion worth of vouchers towards the new car purchases made between July 1–November 1, 2009. Lawmakers may seek to authorize another $3 billion later this summer to extend the program into 2010. The NHTSA is hiring 30 staffers to implement the four-month program and another 200 contract employees to process registration forms and issue vouchers.  

SEMA helped convince lawmakers to permit most parts to be recycled, including the drive train if the transmission, drive shaft or rear end are sold as separate parts. Dealers are required to disable the engines before sending them off for scrappage. The dealers must drain the oil and replace it with a sodium silicate solution, then run the engine until it locks-up. 

The NHTSA has established a website to answer questions about the program: www.CARS.gov.

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