It’s a government program which states it will provide car owners a $3,500 to $4,500 credit toward a replacement vehicle when they turn in their gas guzzler; alleged to conserve resources (oil) and “save the environment”.

This might be a good deal if you are planning on buying a qualifying car from a qualified dealer and you have a qualifying piece of junk to trade in.  But if you happen to have a decent economy car that gets decent mileage and you want to trade up, or if you want to purchase through an individual like I typically do, then forget it – you are on your own.

Here are some particulars from the official government website…

1. Your vehicle must be less than 25 years old on the trade-in date
2. Only purchase or lease of new vehicles qualify
3. Generally, trade-in vehicles must get 18 or less MPG (some very large pick-up trucks and cargo vans have different requirements)
4. Trade-in vehicles must be registered and insured continuously for the full year preceding the trade-in
5. You don’t need a voucher, dealers will apply a credit at purchase
6. Program runs through Nov 1, 2009 or when the funds are exhausted, whichever comes first
7. The program requires the scrapping of your eligible trade-in vehicle, and that the dealer disclose to you an estimate of the scrap value of your trade-in. The scrap value, however minimal, will be in addition to the rebate, and not in place of the rebate

No secret that I am not a fan of government programs or regulation, being that it is the government regulation from decades ago that brought us the mortgage and financial crisises of late.  But I digress.

This plan is potentially good for auto dealers, as well as for manufacturers.  But I do not see it as beneficial for the average consumer.

An ABC News report mentions it this way:

Edmunds says the average sale price of a brand new car is $27,800, whereas the average price of a used car is $13,900. That’s a savings of roughly $14,000 achieved simply by letting somebody else be the chump who buys the brand new vehicle!

Still want to be green? There are plenty of 3-year-old vehicles with excellent fuel economy. The technology hasn’t changed much in the past few years. It’s also a great time to buy used because cars and trucks are incredibly reliable these days. They can easily chug along for 200,000 miles with few problems.

So, you decide. Would you rather save $4,000? Or $14,000?

Point number 7 above brings up some funny thoughts.  Like, I am sure that none of the cars on their way to the scrap yard will get “lost” and end up in auctions or on craigslist as “lost title” vehicles… or on eBay as used parts.  Either there will be such problems, or the government will use taxpayer dollars to hire administrators to regulate the cash for clunkers program, and then there will still be corruption.  (My opinion )

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