Should We Cash In Our Clunker?
I am proud to say that I drive a fuel-efficient car, a Honda Civic Hybrid that gets as much as 50 miles to the gallon on the highway.
My husband's car, on the other hand, is not so green. It's a nearly 15-year-old Land Rover Discovery, and he loves it. They just don't make them like that anymore, he tells me. Thankfully, he is right!
According to FuelEconomy.gov, his car gets a whopping 13 miles per gallon and emits 14.1 tons of carbon dioxide into the air each year. We know we need to replace it -- if only for the sake of the environment -- but we cringe each time we think about taking on a new car payment.
Uncle Sam is about to launch a program that seems designed specifically for us. The official name is the Consumer Assistance to Recycle and Save Act of 2009, but it's more commonly known as just "cash for clunkers." It offers consumers a credit of up to $4,500 if they trade in their old gas-guzzlers for new, more fuel-friendly ones.
The $1 billion program is scheduled to start around July 24. The idea is to help boost auto sales and score some brownie points with Mother Nature at the same time. To qualify, the clunkers must be built in or after 1984 and be in drivable condition. You have to have owned the car for at least a year and must buy a new car to replace it.
I gotta admit, the offer is tempting, which is the entire point. I looked up the value of the Land Rover in the Kelley Blue Book, and our estimated trade-in value is only $800. At first glance it seems like a no-brainer.
But (and there's always a but!), we had planned to start saving money to buy a new car next year. With a little discipline, we would have enough cash to pay for a car in fulll -- no interest and no financing. If we bought the car now, we would have to finance a portion of the purchase. So we'd be able to take advantage of the $4,500 credit, but we may have to pay more over time in interest.
I'll pose the question to you, our loyal Small Change readers: What do you think I should do? Is it worth taking the jump now? Send me your thoughts in the comments below or via e-mail at muiy[at]washpost.com and Twitter at @ylanmui. My goal is to negotiate a deal that would let us turn in our clunker for cash AND get zero percent financing.
And of course, we'll keep you posted on how it goes!
July 20, 2009; 7:00 AM ET
Categories: Bargains , Cheap & Green , Consumer News , Ylan Q. Mui
Save & Share: Previous: Who's Better with Money? Men or Women?
Next: Cash for Clunkers Part 2
Posted by: laura33 | July 20, 2009 9:53 AM | Report abuse
Posted by: sinleing | July 20, 2009 10:09 AM | Report abuse
Posted by: DCChicago | July 20, 2009 11:30 AM | Report abuse
Posted by: laura33 | July 20, 2009 1:24 PM | Report abuse
Posted by: gettingdizzy1 | July 20, 2009 4:23 PM | Report abuse
Posted by: matt17 | July 21, 2009 10:35 PM | Report abuse
The comments to this entry are closed.