If you own a drivable car made within the last 25 years, and still get 18 miles per gallon or even a few miles less, keep it. This bogus "Cash-For-Clunkers" rebate system is nothing but a money grab for the dying auto industry. Under this program consumers are permitted to trade in a car that gets 18 miles per gallon for a large truck that gets even fewer miles per gallon, or new small trucks and SUVs that get the same gas mileage. Does that promote Washington's alleged fuel efficiency aim? Of course not. The government isn't telling you that if your auto is worth more than the voucher you'd be better off taking the regular trade-in value. The vouchers themselves are not an addition to trade-in values; the autos under the cash-for-clunkers program will be scrapped, negating their trade-in value all together.
We find it to be a stretch to believe that anyone driving around in a car that’s worth less than $4,500 can suddenly–in the middle of Great Recession–afford a new car, says Business Insider’s Jay Yarrow. There’s a reason they’re driving around in a clunker, he says, and no $4,500 discount is really going to do much to change that.
Additionally, the scrap value of your vehicle is determined by the dealer; in many cases you won't receive anywhere near $3500 or $4500 for your vehicle. The program is a scam designed to get you in the door.
We're in a depression. The last thing consumers need do is generate more debt. Purchasing a new vehicle imposes an immediate monthly payment obligation in overhead for living expenses plus additional insurance costs for full coverage. If the government was really interested in helping cash-strapped Americans, they would allow the vouchers to be applied to used cars that qualify for fuel efficiency -- even Dianne Feinstein coined this scam "handouts for Hummers."
