Cash for Clunkers Scheme Announced

Big news for the Australian autromotive industry when Julia Gillard announced on Saturday that, should Labor be re-elected, they will introduce a Cash for Clunkers type scheme (officially called the Cleaner Car Rebate) to encourage Australians to trade-in their old cars for new, safer and greener vehicles.

Cash for Clunkers

In essence the Cash for Clunkers scheme means that owners of pre 1995 vehciles will be able to claim a $2,000 cash rebate should they trade their car in for an ‘approved’ new car.  This rebate will be given once the trade-in has been sent for scrapping.

There are several disctinct arguments for a Cash for Clunkers scheme:

1) It’s green.  Many pre-95 cars would today be considered ‘gas guzzlers’ so by taking them off the road and replacing them with more fuel-efficient new cars should reduce the overall emmissions for that driver.

2) It will stimulate the economy.  This was the primary motivation when the Cash for Clunkers scheme was announced in Europe and the US in 2008.  The automotive industry there (and in Australia) is such an important part of the economic picture that more activity created by the cash for clunkers rebate would be very welcome.

3) It means safer cars.  Technology and particularl;y autoimotive safety has come a long way in the last 15-20 years.  Through the Cash for Clunkers scheme, pre 1995 cars will be replaced with newer safer cars replete with ABS, airbags and other standard safety equipment.

There’s a lot to consider with this scheme and in future posts we’ll be addressing the counter argument against the scheme, the politics of Cash for Clunkers as well as the technical aspects such as the list of approved cars and how to claim your rebate.  Stay tuned…