The Cash for Clunkers program being considered by Congress for inclusion in the economic stimulus package is really a wolf in sheep's clothing. The program would earmark federal funds for car owners to trade-in their sport utility vehicles in exchange for vouchers to be used to obtain newer, more fuel-efficient vehicles. On the surface, the program may sound reasonable, but its consequences will create issues for those not fortunate enough to afford the cost of a new vehicle and would be a waste of taxpayer dollars.
Those seeking a "quick fix" have failed to consider the impact of the program on lower and fixed income families as well as charities. By taking vehicles off the road that might be sold as used, the program will raise the price for all used vehicles, thus impacting those on limited income who cannot afford new vehicles. Further, since the parts on those vehicles that are scrapped could be sold as used or reconditioned, the program will cause an increase in repair prices for consumers.
Congress and states have considered Cash for Clunkers proposals in the past and in many cases have decided against them. Providing incentives for individuals to purchase fuel-efficient vehicles or to have their current vehicle maintained is a better use of federal money. Cash for Clunkers programs might look good on paper, but in reality, they are a bad idea and should be rejected by Congress.
Vice President, Government Affairs
Automotive Aftermarket Industry Association