Consumer Law

Is CARS a Good Idea?

By Brian Wolfman

The Consumer Assistance to Recycle and Save Act of 2009 (CARS) is meant to encourage people to trade in their gas guzzlers and buy new "fuel efficient" cars. You trade in the gas guzzler and the federal government funds a $3,500 to $4,500 credit toward to the new car. And the car dealer is required to scrap the gas guzzler, so that it doesn't continue its gas-guzzling ways. The idea is that the consumer saves money, new car purchases increase, and the environment is benefited.

But in a column entitled "One Lemon of a Law," the Washington Post's Michelle Singletary really takes after CARS. She says that "in truth, this is welfare for the limping auto industry. The National Highway Traffic Safety Administration (NHTSA) has been given $1 billion to fund the program. But the law does not apply to the purchase of used cars, encourages people to take on more debt and doesn't require the new cars to get substantially better gas mileage." On this latter point, under CARS, new passenger cars can get as little as 22 combined city/highway miles per gallon (mpg) and SUVs, small and medium pickup trucks, and small and medium passenger and cargo vans can get has little as 18 combined mpg. Check out the government's CARS website for all the details.

Full post as published by CL&P Blog on July 21, 2009 (boomark / email).