A bill that offers government vouchers of up to $4,500 to consumers who trade in their old vehicles for new, fuel-efficient ones could disrupt the prices of both late-model used vehicles and much older vehicles, say those in the used-car industry.
Supporters of the cash-for-guzzlers provision of a bill that has been before the House Energy and Commerce Committee say the measure would jump-start new-vehicle sales, cut fuel consumption and curb air pollution.
But new-car rebates in general depress the prices of late-model used vehicles. And the prospects of government cash could boost the prices of older vehicles because the voucher makes them worth much more.
"When you get to the low end, it could boost used-vehicle values because this vehicle has the potential of having a $4,500 voucher attached to it," says Tom Webb, Manheim's chief economist. What some people call clunkers, he says, "the buy-here, pay-here industry calls inventory."