CarMax wants used cars in vehicle-incentive plan

CarMax Inc. wants Congress to treat them the same as new-vehicle dealers.

The Goochland County-based automotive retailer, the nation's largest seller of used cars, is asking Congress to include used vehicles in proposed legislation that gives vouchers to people trading in their older cars for ones with better gas mileage.

The "Cash for Clunkers" legislation is designed to bolster auto sales and put smaller, more fuel-efficient cars on the road. Analysts have estimated it could boost car sales by 750,000 to 1 million vehicles a year.

Congress is considering six bills. Two of the bills include giving vouchers for those buying used vehicles. "We support any bill that includes used cars," said Tom Folliard, CarMax's president and CEO.

In the Senate, Sens. Dianne Feinstein, D-Calif., Susan Collins, R-Maine, and Charles E. Schumer, D-N.Y., want to give consumers a voucher for $2,500 to $4,500 to buy a new vehicle with better fuel efficiency. The trade-in would need to get less than 18 miles per gallon.

The Senate legislation, which would apply to domestic and foreign vehicles, also would provide vouchers of up to $3,000 for used vehicles or credits of up to $3,000 for mass-transit fares.

In the House, Rep. Betty Sutton, D-Ohio, wants to give car shoppers $3,000 to $5,000 when they turn in a vehicle for something more efficient.

The program would be limited to cars built in North America and require the new car to get at least 27 miles per gallon.

CarMax said some car buyers can't afford new cars, which, in turn, would keep their older and less fuel-efficient cars on the road longer.

It contends there are plenty of fuel-efficient cars and trucks available at used-car dealers nationwide -- including used-car lots at new-car dealerships. CarMax said it currently stocks about 11,900 used vehicles getting more than 25 miles per gallon on the highway.

George Hoffer, a Virginia Commonwealth University professor of economics specializing in the automobile industry, said CarMax is right and the government should include used cars in any legislation.

"Not putting used cars in would be a major mistake, because it would skewer toward higher-income people," he said.

But even if it doesn't, he believes the idea behind the concept is dead-on.

"This is a much more efficient way to generate cash for GM and Chrysler" than the government pouring money into the companies, he said.

Contact Louis Llovio at (804) 649-6348 or .

The Associated Press contributed to this report.