Consider the Real Cost of Cash for Clunkers
Thanks to the new government incentive program Cash for Clunkers, we might be seeing a lot more hybrid and other low-mileage vehicles on the streets - and that's both good and bad.
It's good for the auto industry, because it spurs people to buy more cars. And it has potential to be good for the environment, if people who would have otherwise purchased a less fuel-efficient vehicle opt for a greener version. But it might not necessarily be so good for the wallets of consumers.
In summary, here's how the program works. You trade in a low-mileage vehicle for a version that gets better gas mileage, in accordance with government standards. In exchange, Uncle Sam knocks between $3,500 and $4,500 off your price tag. Looks like a great deal, right? Well, that depends. If you planned on buying that cute new Prius come hell or high water, then yes, you're getting a bargain. If you didn't plan on buying a new car - either because you couldn't afford it or didn't need it - then it's a different story. You can actually lose - rather than save - up to $4,500.
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