States Turn To Cash Incentives To Promote Hybrids

The State of Texas is offering up to $3,500 to families in Houston, Austin and Dallas-Fort Worth to replace vehicles that are more than 10 years old with cleaner vehicles. Qualifying individuals must also have a family income below $63,000.

The $3,500 must be used toward the purchase of a new or newer used vehicle. Families can receive $3,500 toward the purchase of a hybrid vehicle or $3,000 toward the purchase of a truck or car that is no more than two or three years old, respectively. The total vehicle purchase price must be less than $25,000 and also be on a state-approved list of clean vehicles. To date, the incentives have been claimed by 11,000 new car buyers.

California offers a similar program, providing eligible buyers with a credit of up to $1,500 for a new vehicle or $500 for the repair of an older one. Unlike the Texas program, the California program is not income dependent and is available to all state residents. According to state officials, Californians junked 16,000 vehicles under the program last year.

The Canadian government has also introduced a new incentive to convince its citizens to put newer vehicles on the road. The goal of the program is to remove about 50,000 outdated cars and trucks from Canadian highways. The program offers $300 cash, discounts on bicycles or a public transit pass in exchange for an older vehicle.

According to a 2007 RL Polk and Co. study, the average age of passenger cars on the road was 9.2 years and the average age of light trucks was 7.1 years, indicating that most people are hanging on to their cars and trucks longer than they have in the past. Economically, June was the worst new vehicle sales month on record since the Great Depression.

Source: Daily tech