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Plan Offers $5,000 For Your Old Car

'Cash For Clunkers' Plan Could Make You Money

POSTED: 10:29 pm MDT May 4, 2009
UPDATED: 11:17 pm MDT May 4, 2009

Congress is debating a bill that could boost sales for auto dealers and possibly improve the environment.

The Bill, H.R. 1550, rewards owners of cars that are nine years old or older if they turn those cars in for something more fuel efficient and emits less pollution. The plan is known as "Cash for Clunkers."

If a person is willing to literally scrap his or her car, the owner would be given a voucher -- valued up to $5,000 -- to be used toward the purchase of a more fuel efficient car, which would also be more environmentally friendly.

“It will have immeasurable impact, positive impact on the environment and the economy,” said Tim Jackson, President of the Colorado Auto Dealers Association.

Jackson said he supports this bill in concept, but believes the fine points still need to be worked out.

“We would favor a proposal that is good across the board and would apply to domestic and international nameplate vehicles,” said Jackson.

Experts warn if the purpose is to better the ozone, this plan has already failed.

“If it is to control pollution, it won't be very effective,” said Dr. Don Stedman, University of Denver professor who established the ozone reading vans seen on onramps across the metro area. “If it is to give incentives to people to buy new cars it will probably work.”

Dr. Stedman said not all old cars are polluters or as he refers to them, bad cars.

“Just because it is old, doesn't mean it is broken,” said Stedman. “There are more sick 80 year olds than sick 20 year old, but just because you are 80 doesn’t mean you are sick.”

Stedman said this bill can be abused, something he saw with a similar measure in California in 1992.

“If I've got a piece of junk that I hardly ever drive, and is worth $100 and I am going to get $5,000 for it; I’ve got a terrific incentive to do it, even though I never drive it,” said Stedman.

While hundreds of thousands of cars could be sold as a result of this incentive, those who do drive old cars sometimes do so because they cannot afford a new one, even with a $5,000 incentive.

“Not all will be able to afford it even with the additional incentive,” said Jackson.

Jackson said the Colorado Auto Dealers Association believed this bill should include both domestic and foreign cars as both he said would help the economy and environment.

In exchange for the voucher the owner of the car or truck would agree to have his or her vehicle recycled in a scrap yard.

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