The new bill would require traded in vehicles get not better than 18 miles per gallon in fuel, be a model that is at least 1984 or newer, and have been both registered and insured in the last 12 months. The last requirement is designed to keep those looking for quick cash from abusing the program with vehicles from used car lots. The government would initially subsidizes the purchase of up to the first million vehicles and the program would end once the money ran out.

The bill is intended to boost the sales of US autos and reduce American dependency on foreign oil. It also aims to improve the quality of the air. The Congressional Budget Office predicts that the bill will result in selling 150,000 new cars. Auto industry analysts feel the plan, once implemented, could see vehicle sales go up as early as August of this year. Additionally, it is noted that many so-called “clunkers” are in the truck category, which would be a higher sales generation for the truck-specific industry.

The critics fear that the program cost too much and only accomplish a small portion of what it set out to do. Even environmental groups fear that the program can backfire, resulting in the government subsidizing the purchases of SUV’s and other non-fuel efficient. The senate feels that the program will help give a push to the auto industry which is currently struggling to survive, as well as the manufacturers, suppliers, and other auto-related services in the industry. The bill is also being supported by the Association of International Automobile Manufacturers (AIAM). The group feels that since other programs around the world have produced positive results in their efforts, the program stand the chance, if successfully implemented, to help bring some recovery to the United States economy. Since the US relies on the automobile industry significantly, the program can help get the economy back on track in the US.

The bill was initially introduced due to the growing concern that after all of the federal bailout money that has been used to keep the auto industry going, consumers will make the decision to stick with the cars they currently use instead of spending money on a new one. The program’s incentive hopes to steer more American’s into buying new.

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