'Cash for Clunkers' Program Could Help You Buy a New Car
By Ross Edwards
Friday, Jan 16 2009 15:28
The Senate is considering a bill that would pay drivers of fuel inefficient vehicles to give their cars and trucks up for demolition in exchange for a voucher worth between $2,500 and $4,500 toward the purchase of a more fuel efficient one. Senators Dianne Feinstein (D-Calif.), Susan Collins (R-Maine) and Charles Schumer (D-N.Y) sponsored the bill, and estimate that it will help get more than four million gas guzzlers off the road by 2012.
In order to qualify for the “Cash for Clunkers” program, you need to have a car or truck that is currently registered and drivable and that was rated at less than 18 miles per gallon when new.
The only catch is that you need to use this money toward the purchase of a new vehicle that gets 25% more miles to the gallon than the minimum mandated by law. That means any SUV bought would have to get more than 28 miles per gallon combined. Cars eligible for the voucher will need to get at least 34 mpg.
Kicking Tires points out that the only SUVs eligible for the use of this voucher money are the Ford Escape Hybrid, Mercury Mariner Hybrid, Mazda Tribute Hybrid and Saturn Vue Hybrid, all of which are pretty expensive for small SUVs.
There are more cars that get 25% more miles to the gallon than the EPA requires, but they’re all either expensive hybrids or small cars.
If you own a large, fuel inefficient vehicle because you need the functionality and space of it, this bill won’t benefit you in any way. On the other hand, if you’re looking to get out from behind the wheel of a gas guzzler that you don’t need, this exchange could be perfect for you.
The voucher can also be used to pay for public transportation.
For traded-in vehicles that are model year 2002 and later, drivers would receive a voucher for:
The purchase of a new vehicle: $4,500
The purchase of a used vehicle: $3,000
Transit fare credit: $3,000
For traded-in vehicles that are model year 1999 – 2001, drivers would receive a voucher for:
The purchase of a new vehicle: $3,000
The purchase of a used vehicle: $2,000
Transit fare credit: $2,000
For traded-in vehicles that are model year 1998 and earlier, drivers would receive a voucher for:
The purchase of a new vehicle: $2,000
The purchase of a used vehicle: $1,500
Transit fare credit: $1,500
Confused or unsure about some of the car loan terms used in the article? Click here for our Auto Loan Glossary.
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