Curious exactly how the Cash for Clunkers bill works? This handy chart and fact sheet provide all you need to know about trading in a beater Isuzu for a shiny new car.
At first, a look at the chart gives the impression there’s a lot of money to be made by trading in your old car for a new one. Unfortunately, the compromises in this bill make it unlikely many people will be able to utilize it and save a great deal. There are two factors working against making this a worthwhile proposition and they both have to do with the logic of the bill.
First of all, operable vehicles are required and there aren’t many people driving around with vehicles worth less than $1,500. Many old crappy cars, in fact, can still demand up to $2,500 on the open market. This means you’re going to get, max, $2000 for your trade-in. The least valuable qualifying cars, of course, are actually the more efficient compact vehicles, which makes getting the necessary 10 MPG improvement unlikely.
The second problem, stemming from the first, is quantifying the number of people who actually drive around in cars worth less than $2,500 and can actually afford a new car. Instinct tells us there aren’t many people. This means people taking advantage of the program will, typically, have to be excited by the prospect of saving $1,000 or $2,000. These people should already have been swayed by intense discounting from automakers in recent months.
This isn’t to say there aren’t people who won’t be able to get money from the program because, say, they have an old light duty truck and have been meaning to trade up to a newer car for a while. But the greatest number taking advantage of this deal may be people who can afford a new car and have, for one reason or another, decided not to buy one. These people will likely be lured in by dealers combining the $4,500 voucher with $2,000 in additional savings for big numbers like “$6,500 off a new Focus” that ignore the actual original value of the trade-in.
Reed Brothers Automotive is located on Route 355 at the Shady Grove Metro at 15955 Frederick Rd in Rockville, Maryland 20855. Call Reed Brothers Automotive in Rockville, Maryland at 877-681-5021 or visit our website www.reedbrothersautomotive.com
Source: Jalopnik
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