Cash for clunkers: what's eligible?

According to the Federal Government's Green Vehicle Guide there are at least 370 new vehicles that will be eligible for the $2000 rebate in the cash for clunkers scheme proposed by Prime Minister Julia Gillard.

Over the weekend the Federal Government announced that, if re-elected, from next year owners of cars manufactured before 1 January 1995 will be eligible for a $2000 rebate if they send their old car to the scrapheap and buy a new car with a Green Vehicle Guide greenhouse rating of six stars or above.

This star rating out of ten is the equivalent of 220 grams of carbon dioxide per kilometre, currently the Australian fleet-wide average.

With the exception of the $40,000-plus Toyota Prius, all of the top ten cars that qualify for the proposed $2000 rebate cost close to or below $20,000.

They include small city runabout cars such as the Smart ForTwo, Suzuki Alto, Fiat 500, Toyota Yaris, Honda Jazz, Volkswagen Polo and Hyundai i20 (pictured).

Although most cars with six stars or more on the Green Vehicle Guide cost below $40,000, the list also includes luxury vehicles that will be priced out of the reach of ordinary Australians -- more than two-dozen BMWs and Mercedes-Benzes, several Audis, and even a Lotus sports-car.

The Federal Government is yet to announce more detailed eligibility criteria but it may want to take note of last year's North American cash for clunkers scheme, which imposed a price limit of $45,000 on new vehicles that qualified for the rebate.

Many European countries also adopted pricing policies that excluded luxury cars from their cash for clunkers schemes.

The chief executive of the Federal Chamber of Automotive Industries, Andrew McKellar, told the Carsales Network:  "It is our understanding that cars eligible for the rebate must not incur Luxury Car Tax. In any event, let's be realistic, we are talking about cars that are 15 years or older. If somebody has been driving around that sort of vehicle, it's going to a be very low value car. The chance that they're in the market for a new luxury car is reasonably remote."

The government says it anticipates close to 200,000 pre-1995 vehicles will be scrapped under the scheme, and that it has committed $394 million to the four-year program.

Australia has one of the oldest car fleets in the developed world. While the average age of cars in Australia fell from 10 years to 9.7 years between 2004 and 2009, this is still higher than recent measurements in other countries such as the United States (9.4 years), the European Union (8 years) and Japan (6.2 years).

The program is designed for the transition period ahead of the introduction of new mandatory carbon dioxide emission standards for all new cars from 2015.
 
View the list of eligible cars: http://www.greenvehicleguide.gov.au/GVGPublicUI/SearchResults.aspx

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