Cash for Clunkers Program

Cash for Clunkers Program Introduction The cash for clunkers regulation is a program which was designed to allow car owners to trade their used cars with poor fuel consumption rate for more fuel efficient ones. This trade is to be accompanied by a benefit of $4500 from the national government. However, the consumers can only get one rebate with the credit liable to taxation. Similarly trade-in vehicle under joint ownership gets only a single credit.Advertising We will write a custom term paper sample on Cash for Clunkers Program specifically for you for only $16.05 $11/page Learn More The car to be traded should be no more than 18 mpg with the new one having a minimum of 22 mpg. The vehicle to be traded has to have been insured for not less than a year. The vehicle has to be in a state of being able to be driven. The owner of the trade-in car must therefore confirm that the vehicle can be operated on its own power during the trading-in process. Additionally, for vehicles to be eligib le for trading under the cash for clunkers program, it must have a suggestion of retail price from the manufacturer which should be less or equal to $45,000. The trade-in vehicle is required to be registered to one owner for at least one year without change of ownership. In the case where the vehicle is owned by two or more persons, it has to have been registered under one, some or all the parties for the same period of one year (Griffin, 2011, p. 10). For the trade-in vehicle to have an eligible registration, it has to have a registration document showing the purchaser’s ownership for at least one year immediately a year before the trade-in. in case of changes in ownership in a co-owned vehicle during the final year to trade-in, the registration is considered valid with the condition that the purchaser appears in the certification for that same period. The dealer involve in the trading-in of any vehicle is required by the agency to have clear title to be able to dispose the vehicle under the cash for clunkers program. Despite the fact that many consumers consider the use of motorcycles to be economical in saving fuel and environment friendly, this program does not consider them as eligible, not only for trade-in, but also for purchase or lease. When a truck considered as a category 3 trucks is traded in for another category 3 truck, the credit for the new one should be $3,500 regardless of whether the new truck is smaller than the old one or is of the same size. This program covered all the 50 United States and thus, for a trade-in to be eligible the dealer must be a citizen of the United States and the vehicle to be traded in must as well be insured in the United States.Advertising Looking for term paper on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More However, not all vehicles qualify for trading in under this program. The agency has excluded trading in of vehicles which are no t manufactured for transporting people and those that are susceptible to operations off-highway. Such vehicles include pickup trucks, cargo carrying vehicles and vehicles that have physical characteristics in regard to ground clearance. The eligibility of category 1 and 2 trucks is determined by the length of the wheelbase with the shortest ones being more offered for trade-in than the long ones. The trade-in vehicle must be disposed off through crushing to ensure that it does not get on the road again. The success of the cash for clunkers program The cash for clunkers program was definitely a successful one as the economy of the United States has since then been in a better shape thanks to the program. However, the introduction of this program saw a large turnout of consumers which led to exhaustion of allotted cash for the same by the government. The program was almost suspended and due to this, many consumers have new vehicles which mean that the sales were much impressive (Huffm an, 2009). Consumers benefited by getting subsidies for their old vehicles as well as enjoying the new fuel efficient vehicles thus improving their economy. Consumers got encouraged of buying new cars over and over as well as showroom programs. The eligibility of trade-in vehicles on fuel economy should be reduced to cover most of the consumers. Other associated regulations such as registration and insurance should be lessened to help cater for more consumers as well. With availability of funds, I would design the program on a yearly basis to ensure that the environment is improved as well as maintaining the economy of our nation. Effects of the program The main goals of the cash for clunkers program were to help in improving the environment through the use of fuel economical vehicles and also to stabilize the economy for the people of the United States.Advertising We will write a custom term paper sample on Cash for Clunkers Program specifically for you for only $16.05 $1 1/page Learn More While these goals may seem to have been met, the program was not much effective since the many regulations to the program left out so many consumers and environmental impacts resulting from the use of old fuel inefficient vehicles was not completely dealt with. Similarly, the economy cannot be said to have improved especially with the destruction of the old cars for the trade-in program. This is because this move would mean more costs on spare parts; many such businesses will be closed, consumers with the new vehicles will have much increased monthly payments and low income earners will definitely be disadvantaged because most of them purchase old cars which are required by this program to be destroyed hence increasing the costs of the few left (Toggle, 2009, p. 1). Reference List Griffin, K. (2011). Tips and advice on understanding cash for clunkers. Web. Huffman, M. (2009). Cash for clunkers success a positive economic sign. Web. Toggle, K. (2009) . Cash for clunkers program in full swing. Web.