Washington, D.C. – Seven trade associations, representing the automotive aftermarket, have raised objections to a “Cash for Clunkers” program being considered by the U.S. government. The program is an inclusion in the economic stimulus plan currently being considered in Washington.

Under the current proposal, Cash for Clunkers would use taxpayer money to purchase and crush older vehicles for scrap metal. The associations submitted a joint letter which stated that the program has no proven value, and will do significant harm to the automotive aftermarket, a US$285 billion industry that employs approximately 4.5 million Americans.

“These programs have been generally rejected by the states, since they are not a cost-effective means to improve fuel mileage, reduce emissions, or spur new-car sales,” the group said in the letter. “Conversely, Cash for Clunkers programs threaten jobs in the automotive aftermarket, since they remove the opportunity to repair and upgrade existing cars and raise the price of used cars and parts.”

The associations pledged support for legislation to provide tax incentives to purchase new cars, such as allowing deductions for interest on car loans and state sales tax, and also supports tax credits to help upgrade, repair, or maintain older vehicles.

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