Cash for Clunkers? Keep the Clunker and the Cash!

Cash for Clunkers has been a big hit among many Americans. Getting up to a $4,500 credit for that old clunker you've been driving around sounds like a great deal...or does it? The people that are really winning are not so much those trading in their old cars, but instead those financing the new ones being purchased and the dealerships selling them.

There are some cars that should surely be off the road for a number of reasons. For those, I will be the first to admit, it is a great program. The program was intended to help the environment by getting gas guzzlers and ozone destroyers off of the road as well as helping the person who has been stuck driving around town with a car that is being held together with duct tape and a prayer. But is the program really making that type of impact?

The buzz that I am hearing about the cash for clunkers program from many of my colleagues and acquaintances around town is not a story of environmental heroism and financial savings. It is actually anything but to say the least. Since the program requires those trading in their "clunker" to purchase a brand new vehicle, I am hearing people with new automobile payments that they didn't have with their paid off gas guzzler. With the economic times we are in, that is not a good place to be.

Now, I love the Earth as much as the next person. I don't want to see us destroy the planet that God has given us to inhabit. But I also don't want to see good people get suckered into a good deal so that they can save the environment but ruin their financial state of being, and only having a shiny to car to show for it.

The automobile dealerships around the country are still wiping the saliva from their chin over this program and the banks are having flashbacks of the housing market just a few short years ago. Times are good for these folks right now with the Cash for Clunker program. But, again, my concern is that our folks in Washington D.C. did not fully think this program through. This would have been a better program to put in place when job employment numbers were at a lower level or when we were officially out of a recession and people felt a little more at ease with where their next mortgage payment was going to come from.

While I am little frustrated at the government for passing legislation that served to put the people that needed the most help financially even more in debt, the real person to blame is the uninformed or the undisciplined American. You would have thought that we would have learned our lesson with debt over the last couple years. You just can't have debt and expect to be a financial success. For those who really needed a new car for safety, then good for them for using the program. But for those who just wanted a new toy to put in their garage and thought that the Cash for Clunkers program was their ticket to automotive indulgence, I am truly saddened.

My thought is that if you are thinking about trading in your paid off (or nearly paid off) clunker for a brand new car off the showroom floor...think again. Unless you are scared that your car won't make it from point A to point B because of the condition of it, just keep on driving on your humble way. The only way for many Americans to really make out with the Cash for Clunkers deal is to avoid it altogether. So go ahead and keep the clunker and save some real cash.