Cash for Clunkers, the $1 billion government program that pays thousands of dollars for your old car if you switch to a newer more eco-friendly vehicle, kicked off this week. Does your car or truck qualify? Should you sell it to the government? Does this policy make any sense? Let's get to the answers:
1. Does Your Vehicle Qualify?
-- It's less than 25 years old
-- It's listing price is under $45,000
-- It has an EPA estimated 18 MPG or under -- (check official MPG here)
-- You can prove that it's been continuously insured to prove that you're not just trading in a lemon that's been collecting moss in your backyard.
2. How Much Money Will You Get?
It depends on whether your new vehicle is a car, SUV or truck.
Trading in a Car...
If you trade in a car for a car, and your new car's fuel economy is 4 - 9 MPG higher than your clunker, you get $3500. If the new car gets 10+ MPG higher, you get $4500. If you trade a car for a new truck or SUV, only 2 mpg higher will get you $3500, and only a 5 mpg improvement will net you $4,500.
Trading in a Truck
For SUVs and trucks, the standards are much looser. If you're trading an SUV or van for another SUV or van, a 2-4 MPG improvement lands you $3500, and 5 MPG or more gets you $4500. The standards get even looser for larger trucks and as CNN explains: "If you're trading in a truck with Gross Vehicle Weight Rating (GVWR) of 8,500 to 10,000 pounds, all you have to do is buy a new one. Fuel economy doesn't even factor into it."