US scrappage scheme receives further $2bn
The US Government’s Car Allowance Rebate System (CARS), branded the “cash for clunkers” scheme has received an additional $2 billion (£1.19 billion) – approved by the US Senate, after an initial $1 billion ran out in just 10 days.
The “cash for clunkers” scheme has been designed to help bring the US economy out of recession by boosting new car sales. Car owners can receive federal subsidies of up to $4,500 (£2,600) for trading in their old cars for new ones.
The scheme is proving successful after July has been the best month for sales in almost a year.
Similar schemes have been introduced in Europe with Germany recently reporting car sales were up 40%, while in the UK, the scrappage scheme, dubbed the “bangers for cash” scheme is also proving to be successful.
Returning to the US, President Barack Obama said: “‘Cash for clunkers’ has been a proven success.”
“The initial transactions are generating a more than 50% increase in fuel economy; they are generating $700 to $1,000 in annual savings for consumers in reduced gas costs alone, and they are getting the oldest, dirtiest and most air polluting trucks and SUVs off the road for good,” Mr Obama added.
The additional $2 billion is enough to help consumers purchase 500,000 more new cars.
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