All Programs Are Not Created Equal

Cash for Clunkers Not Great for Everyone

With the latest government program intended to help the automobile industry, the cash for clunkers program is designed to help individuals reduce their car payment and trade-in older cars for newer cars that get better gas mileage. Unfortunately, this program is not quite as worthwhile as it seems on the surface. In most cases, the cash for clunkers program is designed for those individuals with a vehicle that is worth more than what the trade-in value being offered amounts to. With these minimal amounts of cash being offered, it might be a good idea for individuals to consider exactly what they're getting into. Being offered a scant few dollars in savings on a reduced car payment for a running, fully functioning automobile in order to trade in for a brand-new automobile that comes with a hefty price tag might take a few moments consideration. After careful deliberation, it doesn't really make sense for very many consumers.

The specific requirements indicate that the trade-in has to be in decent shape, running and legally able to operate on the highways of America. This would indicate that the car being traded in via the so-called cash for clunkers program not only runs good, but is also 100% paid for. There are very few situations that would make sense for people to take advantage of in the cash for clunkers program. Trading a fully functioning vehicle for a fraction of a discount on the full cost of a brand-new vehicle only makes sense if you are already planning on buying a brand-new vehicle and junking an older vehicle. It boggles the mind to think that anyone would want to get rid of a vehicle that actually runs, is legal to drive on the street and is completely paid for in exchange for a reduced car payment through the cash for clunkers program.

Upon further dissemination, it seems that there are quite a significant amount of caveats and addendums to the cash for clunkers programs that make it even less attractive to the consumer. The vehicle being purchased has to get a significant amount of improved gas mileage over the vehicle being traded in. This is all well and good except for the fact that in many cases the individual might require a large vehicle for work purposes or to tow a boat or other recreational vehicle. In fact, there are a great many individuals that would prefer to trade in their existing vehicle in order to purchase a heavy-duty vehicle that is capable of doing more for their family. This is a common desire, the ability to trade in an older vehicle for a larger, more spacious vehicle for a growing family.

For most individuals, it makes far more sense to just keep the so-called clunker and simply do everything possible to reduce the existing car payment. After all, no matter how you dress it up, a new car payment is a new car payment and would break the bank for many individuals who are already struggling to make ends meet. The last thing that you want to do in an economy that is suffering from a murky future is to chain yourself to another car payment when you have a perfectly functioning vehicle to begin with. For those who are not so good with math, consider this; even the most fuel efficient car in the world will not save enough money to offset the amount required to make a new car payment. Simply subtract the amount of the car payment from the amount of fuel that can potentially be saved and see how much you are really spending. It's very likely that in the long run, you will be spending $200-$500 more per month more than you are currently, even if you are driving the worst clunker that Detroit ever produced.