By Kendra Marr
Washington Post Staff Writer
Sunday, July 19, 2009
Washington's wordsmiths are at it again. A new federal program seems to have changed the very definition of the word "clunker."
A vote, a stroke of the pen, a desire to get Americans buying cars and a mandate to shrink greenhouse gas emissions have turned a fleet of old Audis, BMWs, Acuras and other luxury cars into clunkers overnight.
The Consumer Assistance to Recycle and Save Act of 2009 -- also known as "Cash for Clunkers" -- will offer vouchers of up to $4,500 for car owners who trade in their old fuel-slurping cars for new models that can really stretch a tank of gas.
But if you imagine a clunker as that old, rusted piece of junk that can barely accelerate on the interstate, think again. The list of potential clunkers includes a zippy 1997 Lexus SC 400 coupe and even a luxury 1998 Mercedes-Benz M-Class sport-utility vehicle.
Mileage is key to identifying a clunker. To qualify, cars and trucks cannot get more than 18 miles per gallon for combined city and highway fuel economy. Industry watchers say vehicles made in the mid-1990s are among the most gas-guzzling cars and trucks on the road. The trade-ins must also be drivable and built in or after 1984.
But how to scrap a 1992 BMW 8 Series that's still purring?
"No, that's a classic at this point," said Robert Ogust, general manager at BMW of Fairfax.
The National Highway Traffic Safety Administration, which is weighing how to pay dealers and prevent fraud, will complete the final rules and jump-start the $1 billion program around July 24. But the current requirements create a surprising list of cars and trucks.
"Some are even fairly new," said Philip Reed, senior consumer advice editor for Edmunds.com, which has compiled a database of qualified makes and models. "They're not at all what people think of as clunkers."
And many are valued much higher than the $3,500-to-$4,500 rebate.
Owners of vehicles with limited production runs, such as the Buick Regal T-Type Turbo, will clearly pass on the program. So will collectors of exotic vehicles. Who would crush the legendary 1987 Porsche 911 Carrera?
"I don't think anyone would turn in a classic car," said Buddy Burness of Bowie, member of the Asphalt Angels of Maryland Car Club. "That's something someone wants to fix up. It's not a piece of junk."
Of course, looks can be deceiving.
"Even though it looks good, sounds good and runs well, it's probably putting out a lot more emissions than the replacement vehicle would be," Reed said.
"Bucks for Trucks" might be a more accurate name for the program.
A new car getting at least 10 more mpg than the old car would be eligible for the full $4,500 voucher. But truck owners only need to improve their fuel economy by 5 mpg for the maximum rebate.
"The bogeys you have to meet on trucks are simpler," said Jack R. Nerad, executive editorial director at Kelley Blue Book, a leading provider of information on new and used vehicles.
And don't think about cheating. That car sitting on cinder blocks doesn't count. Those scheming to buy a $300 clunker and trade it for $4,500 toward a new car are going to be disappointed. The law requires a person to continuously own and insure the car for at least a year before trading.
The rebates will apply to new vehicles until Nov. 1 or when the funds are exhausted. A number of estimates say it will spur about 250,000 sales. That's a tiny bump considering the industry is on pace to sell about 10 million vehicles this year.
"It really only affects a fairly small subset of car buyers," Nerad said. "That's the car buyers who currently own a clunker, a low-fuel-economy vehicle worth less than $4,500, and have financial wherewithal and desire to buy a new car."
Already, lawmakers are pushing to expand the program.
In the meantime, dealerships are competing for consumers' rebate dollars. Mile One Automotive, which owns a number of dealerships in the region, proclaims on its Web site, "Mile One has the Area's Largest Selection of Qualifying Cash-for-Clunkers Vehicles." A Virginia Beach dealership tells customers interested in the program, "Checkered Flag has the most fuel efficient lineup of new vehicles in Southern Virginia, so you've definitely come to the right place!"
The new law bars showrooms from using the credit to offset rebates and discounts being offered to the dealer and manufacturer.
Yet Reed has some advice: "Don't walk into a dealership and say, 'Hey, I'm ready to cash in on Cash for Clunkers now. I'm ready to pick up a new car.' They're going to hold the line on purchase price of vehicle. The smart shopper calls, gets quotes and doesn't say anything about a clunker."