Is Cash for Clunkers Right for You?

The Cash for Clunkers program is a federal initiative that was part of the larger Automotive stimulus package instituted by the Obama administration in early 2009. Cash for Clunkers is a voucher that is offered to individuals who purchase a newer automobile that has a better fuel efficiency than their current car or truck. Also known as the scrappage program, cash for clunkers has come under fire by Republicans in recent months for grossly overspending its initial budget. Criticisms of the program aside, let's take a closer luck at the voucher initiative and try to answer the question: is cash for clunkers right for you?

In order to decide whether cash for clunkers is right for you, it is important to consider what sort of vehicle you have now, as well as the type of vehicle that you are currently in the market for. The cash for clunkers voucher is only available for one sort of vehicle upgrade: individuals who are willing to purchase a vehicle that gets better gas mileage that their current vehicle. For instance, if you are a person who has a gas guzzling SUV that is on its last legs and are considering buying a newer vehicle that has better fuel efficiency, then cash for clunkers is right for you. However, if you are planning on staying with a vehicle model that has poor gas mileage, you are simply ineligible for this particular federal initiative.

Republicans are arguing that this program and the speed at which it went over budget exemplify the inherent difficulties in allowing the federal government to play a direct role in steering the direction of an industry. As both camps set in for what promises to be a heated battle of over the future of health care in America, Republicans are pointing to the cash for clunkers program as an example of how quickly a well intentioned initiative can run amok. Defendants of the initiative, on the other hand, are quick to point out the popularity of the program with consumers and how it seems to be creating a true change in consumer choices toward improved fuel efficiency standards.

While this program has been widely popular with auto dealerships and consumers, it faces an uncertain future. Due to how quickly the program ran through it's initial budget, the cash for clunkers program is currently depending on Congress to approve another batch of funds to keep it running. If you think that the cash for clunkers program is right for you, it is a good idea to close on a deal in the near future while the voucher is still available.

Sources:

http://thecaucus.blogs.nytimes.com/2009/08/02/cash-for-clunkers-become-a-republican-target/?hp

http://abcnews.go.com/Politics/story?id=8237690&page=1