David Lausche is doing the math.
Miles per gallon. Trade-in values. Four cylinders versus six.
He’s hoping he can come up with the right answer: a new truck, with a $4,500 savings courtesy of the federal government’s new Cash-for-Clunkers program. The program, which formally took effect today, offers new-car buyers credits of $3,500 or $4,500 if they trade in older cars for more fuel-efficient models.
Lausche is considering whether to buy a V-6 engine – which would only qualify him for the $3,500 price break – or go for the smaller engine and get another thousand off.
“If we go to the smaller engine, we might increase our mileage by at least 5 or 6,” he said.
Car dealers hope the program drives more business their way. Many dealers have been sweetening the pot with added incentives, such as Chrysler’s pledge to match the federal price cut – essentially doubling any incentive a buyer might have. The $1 billion program is expected to put 250,000 new cars on the road by November.
“I think that it’s going to drive a ton of people in,” said Eve Knudtsen, owner of Knudtsen Chevrolet in Coeur d’Alene. “How many of those people qualify will be another thing.”
The basics of the program – intended to give a boost to lagging auto sales and to reduce auto emissions – have been well-known since President Obama signed it into law a month ago. Buyers trading in operable cars that are up to 25 years old and get 18 mpg or worse can get a credit for buying newer, more fuel efficient cars.
But many of the details weren’t hammered out until today, including how dealers would record the transactions and get paid, how they would dispose of the trade-ins to ensure they’re taken off the road, and many other things.
Russ Spalding, owner of Spalding Auto Parts, said he’s been hearing from dealers and arranging ways for them to dispose of the “clunker” trade-ins and find out their salvage value. Under the program, the car’s engines must be destroyed, but other parts could be resold, he said.
“I’ve been talking to a lot of different dealers in town today, trying to determine exactly what the program’s about,” Spalding said. “There’s a lot of questions about how to do it. … What parts can I sell on the vehicle? What parts can I recycle? These are some of the things we’re wading through right now.”
sponsored According to two 2015 surveys, 62 percent of Americans do not have enough savings to handle an unexpected emergency, much less any long-term plans.