Government helps Americans buy cars at lower prices

A simplified version of the cash-for-clunkers program was passed by the Senate Thursday. According to this program, new buyers are given rebates if they turn in older, less fuel-efficient models.

The program, offering $3,500 or $4,500 cash vouchers, could push up sales this year by about 250,000 vehicles and help dealers get customers back and will kick-start the anemic car market, said American International Automobile Dealers Association President Cody Lusk in a statement.

As General Motors CEO Fritz Henderson said, the automaker is seeing some stabilization in its sales this year and could see a sales boost of about 10% if the cash-for-clunkers program takes effect within 30 days of being signed by President Obama, which he has said he will do. It is expected to be in operation in early August and expires Oct. 1, and its spending is limited to $1 billion.

The program works in the following way: the owner of the trade-in must have had it at least a year, and it must be drivable. Dealers must provide assurance the trade-in then is scrapped.

However, Jeremy Anwyl, CEO of consumer website says that even 250,000 new vehicle sales will not provide the impact needed for an industry looking for at least 5 million in additional sales.