If the Obama administration has its way, car dealers, rather than the Internal Revenue Service, would get the job of handing out $7,500 federal credits to buyers of plug-in hybrids and electric vehicles.
That's good for consumers, but could open the same can of worms that cash for clunkers did in 2009. Back then many dealers complained about having to wait weeks to be reimbursed by the feds after fronting clunker rebates.
People who buy a Nissan Leaf, Chevrolet Volt, or other qualifying alternative-power vehicle receive a $7,500 credit when they file their federal income tax return. U.S. Transportation Secretary Ray LaHood says letting retailers handle the credit as a rebate would encourage more hybrid and EV sales. Buyers wouldn't have to finance that extra chunk of the purchase price and then wait months, until tax time, to be reimbursed.
LaHood expects Congress to consider the proposal in the coming year.
"When you give people that incentive to buy a battery-powered car, they'll do it," he said last week while touring a lithium ion battery plant Nissan is constructing in Smyrna, Tenn.
LaHood says cash for clunkers worked because the gratification was immediate. But will dealers face another painful time lag with the reimbursement? Guidelines haven't been written, so LaHood said he doesn't know exactly how it would work.