Cash For Clunkers Program Explained For College Graduates

I had a few readers on Twitter ask me about the Cash for Clunkers Program that has been popping up on many news outlets and personal finance blogs. To be honest I had no answer for the readers so I told them to hold up while I conducted some research. After searching around for more information on the Cash For Clunkers Program, I found a great post at Good Financial Cents about the Cash For Clunkers Tax Rules and an ABC story on the program.

How The Cash For Clunkers Program Works:

- You may quality if you own a car made in 1984 or later that gets 18 miles to the gallon or less.

- The car must start, and been insured/registered for the last year.

- The government will give you $3500 if you trade it for a car that gets four more miles per gallon.

- You will receive $4,500 if your new car gets 10 miles more per gallon.

- You only have to increase mileage by 2 to 5 miles per gallon for SUV’s and pick up trucks.

- Your new car must be brand new and cost less than $45,000.

What does the Cash For Clunkers Program Mean for me?

1. An incentive to purchase an environmentally friendly vehicle (translation: buy a car cheaper on gas). We all talk about buying a car that’s better for the environment but when it comes down to it we would rather drive whats cheapest or in most cases- what is handed down to us by our parents.

2. An Opportunity to finally buy a new vehicle. I ranted about purchasing a car and I discussed that when buying a new car you should search for value/quality and not image. With the Cash For Clunkers Program you have the chance to finally buy a new car that is also great on gas.

3. Fairly hassle free way of getting rid of your old car. I’m sure many young professionals reading this are thinking about how they can get rid of that old car that has been around since their parents graduated from college. Well now you have a relatively hassle free way of getting rid of that old clunker and you can tell your parents it’s for a “good cause.”

4. An opportunity to get everyone off your case. Your friends can finally stop bothering you about driving a “gas guzzler” and your environmentally friend can get off your case for polluting the environment. We all have that environmentally friend that takes environmental issues very seriously and always lectures us on our pollution.

5. Cash For Clunkers allows you to save money on gas. By getting rid of your old gas guzzler you will end up with a more economical car that helps you save money on gas. Less money spent at the gas pump is always a good thing.

Remember that ever since the US Senate and the House of Representatives passed the Consumer Assistance to Recycle and Save Act 2009, everyone has been looking into this program, not just you. In fact the ABC News story claims that $35 million of the $1 billion set aside for the Cash For Clunkers has been used up. Remember that once the budget for the program dries up the program will come to an end, even if its before the November 1st deadline.

I have heard lots of criticism about the Cash For Clunkers Program so I was wondering if anybody could share any stories on the program?

photo: dave_7