CAP Cash for Clunkers in California Program

If you have an older car and live in California, the state would like to pay you to trade in for a newer, more fuel-efficient vehicle. This may come as a surprise to many California residents, as the program hasn’t been widely advertised this year. In fact, only 22 people across the state of gotten a new vehicle from the program in 2014.

According to the California Watchdog website, state employees have sent more than 12,000 letters to notify people that they were eligible to receive a portion of the $3 million that has been set aside from the state budget for the program. Unfortunately, low incentives and a complicated redemption process may be deterring residents from taking advantage.

The program is currently suspended while lawmakers rewrite the guidelines in a way they hope will make the program more successful. It will relaunch in 2015. At the same time, funding for the cash-for-clunkers program has been extended until 2024. In fact, there are also calls for the incentive amount ($2,000-$2,500 depending on family income) to be increased.

It is hoped that by encouraging families to buy a new car sooner, they can remove older, less environmentally friendly vehicles from the road. It is believed that over half of the pollution in California is caused by 10 to 15 percent of the older vehicles that clog the state’s roadways. The new vehicles will be more fuel-efficient, and produce less pollution.

With tightening air quality standards being leveled on manufacturers, it is important to get people into these newer cars as soon as possible. Unfortunately, the expense of buying a new vehicle often deters people, causing them to hold on to their older cars for as long as possible. Unfortunately, many dealers feel the state is taking the wrong approach.

According to president of the California New Car Dealers Association Brian Mass, the better approach will be on requiring owners to retire their vehicles once they’ve reached a certain point in their lifespan. “You can’t sell a car to somebody if they are unwilling to get rid of their older car,” he said. Currently, most of the $30 million the state sends to its modernization program go towards the 3-year-old car retirement program. This has been far more successful than the replacement initiative.

That portion of the program was enacted in 2010, and gives between $1,000 and $1,500 to residents whose vehicles fail to pass their smog check. However, it is currently unclear what the environmental effect of that program have been. Nearly 60 percent of the vehicles retired under the initiative were unregistered, suggesting they were not being driven on the road anyway. In order for the state to achieve its goal, it needs more of the older vehicles currently being driven to be traded in for newer models.

A public hearing on the program was held on June 26 to discuss currently planned and potential future changes to improve the program. The hearing considered comments from residents across the state.