Get $4,500 towards a new car. What's the catch? - KLTV.com - Tyler, Longview, Jacksonville |ETX News

Get $4,500 towards a new car. What's the catch?

By Courtney Lane - bio | email
Posted by Ellen Krafve - email

TYLER, TX (KLTV) - Take in your old gas guzzling clunker and get government money to buy a new, more fuel-efficient car. The house passed a "Cash for Clunker" bill Tuesday, which now goes before the Senate. If passed, you could get up to $4,500 towards a new car by trading in your old one, but some local dealers and a local congressman says it could all backfire.

Getting gas guzzlers off the road and boosting new car sales. Plus, help the environment because the old cars would be crushed or shredded. While it might sound good, local dealer Lance Brown says realistically it won't work.

"I think they tried this in Dallas, buying clunkers, less fuel economy and ones with emission problems and they just flooded the market with the junkyards and trade-ins," said Brown. 

Under the House version, your clunker must be registered and insured in your name and used for at least a year. The new car must cost less than 45,000 dollars. As far as gas mileage goes, the old guzzler must get 18 miles per gallon or less, while the new one should get 22mpg or higher.

Representative Louie Gohmert said this would just encourage Americans to buy foreign-made cars.

"How nonsensical is that," said Gohmert. "We're borrowing money from the Chinese in order to pay people to buy foreign cars, which for the most part is what's going to happen because of the way this thing is structured."

Congressman Gohmert, who voted against the bill, worries it could backfire.

"The cost of used cars is going to go up because they're going to take all these cars that are traded in and take them off the market," said Gohmert. "So it may temporarily hurt used car dealers but even more than them the people that will be hurt are the people that buy used cars."

"I can't see that it would be advantageous, especially right now, for the used car dealers and on the new car dealers," said Brown. "They need to know what kind of supply they're going to continue to get."

The program would cost $4-billion, which Gohmert says would only run us deeper in debt.

"We are borrowing it and we are printing it," said Gohmert. "It's worse than watching sausage being made, it really is."

ABC News reports the earliest we could see this program in action is October. But again, it must pass the Senate first and revisions are being debated.

©2009 KLTV. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Powered by Frankly