The ads are beginning to run on T.V. The cash for clunkers program has begun, and you may be wondering how it works and how it can benefit you.
First you need to find out if you have a clunker at all. I looked out the window at my 1991 Buick and was pretty sure I did, but when I went to http://www.fueleconomy.gov/feg/findacar.htm I was shocked to learn that I didn't!
You see my buick had a combined MPG of 19 when it was new, and passenger cars must have a combined MPG of NO MORE THAN 18... So I was out of luck.
If your clunker was rated at less than 18MPG when it was new, and your car is less than 25 years old, is driveable and you have owned and insured it for at least a year you may be eligible to trade it in on a new car and get up to a $4500 credit!
A couple of things to watch out for though... your clunker may be worth more than $4500 so be sure to check http://www.kbb.com/ before you make the deal. Also, know that your car will not be resold. In order to participate in the program your clunker has to be destroyed.
Also, you will have to buy a brand-spanking-new car and take on the financing associated with it. Trading in your old car on a gently used one may be a better deal.
Also, there are some limits on the new car you can purchase. It has to have a sticker price of $45,000 or less and it has to have a fuel economy rating of at least 22MPG. If you improve your fuel economy by 4 miles per gallon (clunker got 18, new car gets 22) you get a credit of $3,500. To qualify for the full $4,500 you need to improve your mileage by 10MPG.
Now some trucks, SUV's and Minivans have slightly different rules. The new vehicle has to get at least 18 MPG and can offer as little as a 2 MPG improvement over the old one to qualify for $3,500. With a minimum 5 MPG improvement, you can qualify for $4,500.
So, check it out. If you have been hoping to get a new car or truck that extra credit toward your purchase could come in handy, but don't wait too long. When the money is gone the program ends.
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