Dubbed the CARS (Consumer Assistance to Recycle and Save) Act, the newest bit of auto-rescuing legisltation to be handed down from the benevolent gods on Capital Hill aims at getting U.S. citizens out of their “clunkers” and into new cars – provided, of course, that said citizen is not an individual with respect to whom a deduction under section 151 of the Internal Revenue Code of 1986 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins; and said citizen’s adjusted gross income reported in such return was not more than $25,000 ($40,000 in the case of a joint tax return or a return filed by a head of household (as defined in section 2(b) of the Internal Revenue Code of 1986). So essentially, the government wants to help you tack on a car payment to your list of monthly expenses, but only if you’ve demonstrated an income so low that you probably can’t afford it…but we digress.
As per the preliminary terms of the CARS Act, as long as the vehicle is at least 8 years old, the feds are willing to shell out $5k for all vehicles manufactured in North America, and $4k for select imports. Although it is unclear how much of the wording, if any at all, as been changed since the bill’s original drafting in December, the basis for which the government will consider a new car eligible for the program still remains rather confining. For PR reasons, Congress was obviously prohibited from directly stating “Up yours, Asia,” and instead elected to take a more subtle approach, creating rather limiting criteria for which vehicles could be eligible for the new car incentive. As per the terms of the Act, in order to qualify, a “new” vehicle (meaning one that has not yet been registered) must have been produced by an automobile manufacturer that has (and we quote) “(i)operations in the United States, the failure of which would have a systemic adverse effect on the overall economy of the United States or a significant loss of United States jobs, as determined by the Secretary; and (ii) operated a manufacturing facility that produced automobiles or automobile components in the United States throughout the 20-year period ending on the date of the enactment of this Act.” Among some of the more less stringent requirements, all new cars must also cost no more than $35,000 and must feature a higher fuel-efficiency average than the recipient’s current vehicle.
Although it is unclear how those terms have been modified in the current bill, if at all, the government’s primary objective is still similar to that of many of Detroit’s urban entrepreneurs, mainly: moving local product. Enthusiastic with the CARS Act, GM, Ford, and UAW have all expressed their zealous approval of the legislation, gushing that it will provide an enormous boost in consumer confidence and hopefully jump-start lackluster industry sales.