Friday, July 24, 2009
Cash for Clunkers?
Here's the deal with the Cash for Clunkers stimulus that the government has passed.
First off, it begins today. It serves as motivation for Americans to get rid of their old, gas-guzzling cars. The motivation? Anywhere from $3,500 to $4,500 in government (aka your) money, taken off the immediate price of the New vehicle. In a nutshell, your "Clunker" must be rated at 18 mpg (miles per gallon) or less, and the new car you purchase has to achieve at least 22 mpg. Meet that requirement and you're eligible for $3,500 bucks. If your new vehicle surpasses the old car's mpg by 10 or more, congrats, you get $4,500. Different but similar rules apply for SUVs and trucks.
But is it really as good as it sounds? Sure, the money is there, ready for the taking. $1,000,000,000 of it (that's a Billion). But does that really make it worth it to you? Not necessarily. Think of it as Uncle Sam sending 250,000 referrals to bankrupt dealers across the country, and paying for it. But we know who really pays for it.
When you "trade" your clunker in the "Cash for Clunkers" deal, you are not getting a trade-in value for your car. Instead, your car is to be scrapped, never to see asphalt again. Your trade, if the dealer is honest enough to do so, will earn you a few hundred bucks for the scrap metal. When you trade in a car, you save money on the tax value for the said car, but in "Cash for Clunkers," you miss out on that opportunity.
New cars depreciate exponentially within the first couple of years, and depending on the car, that depreciation will be much more than the $3,500-$4,500 that you "saved" when rolling off the lot.
Instead of being allured by promises of "free money," be smart and save even more money by purchasing a pre-loved vehicle. Save yourself the stress-induced headache as well by coming to LeSueur's.
"New car standards, used car prices," is our standard. Not only are you saving thousands on a used car, you're also getting a real trade-in value for your clunker (but we won't offend you, so we'll call it a car, instead). On top of saving more than $4,500 on a used vs new, and getting money for your car (plus the tax you save on the trade), you also save by paying the lowest tax in the valley, and fees so small your wallet won't scream at you from beneath your bum.
But, in the end, it's your clunker (I meant car, sorry). If you can send that poor car off to be flattened, and still sleep at night, more power to you. Thanks for reading!