I would sure love to trade in my 2006 Pontiac Grand Prix for a sporty new model, but I don’t think the Cash for Clunkers program is for me. Despite the fact that I’m spending God-awful amounts of money on a car with very poor gas mileage, I’ll probably be stuck with my automobile for at least a short while longer. I should probably have thought ahead when I was purchasing the car three years ago – gas was high, but had yet to reach the stratosphere. Still, I was more concerned with the comfy seats and powerful engine (which led me, along with poor driving, into about 3 accidents in a one-year period). In my purchase defense, I did get a very good deal on the car after shopping around. It just wasn’t as good a deal after I realized how much my weekly gas bill was going to be (@ $45/wk).
But enough about my problems. I’m happily driving my husband’s Prius these days, and have the gas-guzzler parked. What I’m really wondering about is how many people are really eligible for the government’s Cash for Clunker’s incentive. Here is a link to an article about the program from MSN Money that has more than you thought you’d need to know:
http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/cash-for-clunkers-the-rules.aspx?GT1=33009
From what I have gathered, you really need an old, gas-hog of a vehicle to come close to qualifying. And it seems likely if you’re driving this kind of a clunker, you probably can’t afford a new car payment. However, the MSN article says there are cars out there for under $10,000 (the Ford Fusion pictured here is reasonably priced and gets good mileage). But there are exceptions to every rule, and I’m sure there are some people who will benefit… it will just be interesting to see how many.
Importantly, the MSN Money recommends buyers limit loans to four years and put down at least 20% of the price of the car. Her car-buying rule of thumb: Keep payments to no more than 10% of your monthly gross income. You can also use the $4500 government voucher as your down payment, so that’s pretty sweet. But in this economy, if your credit isn’t stellar, it makes no sense to spend money on a new car, if you have one that’s paid off and actually runs.
