Whether you drive an old SUV, truck, wagon or sedan, you may be able to trade it in for a $4,500 government voucher toward the purchase of a new car.
What cars qualify? Here’s what you need to know.
Regardless of whether you have an SUV, truck, wagon or sedan, your old vehicle has to have a fuel economy rating of 18 miles per gallon or less to get a credit toward the purchase or lease of a new car. This would most likely affect drivers with older, larger vehicles.
What’s more, for the deal to even pay off, your trade-in should be worth less than the credit you can get, otherwise you might as well just sell it if you can get more than you would if you traded it in under the program.
Most Likely Trade-Ins
SUVs have dominated roads across America since the early 1990s, so chances are, they’ll make up a large number of the cars traded in under the Cash for Clunkers program.
The top selling vehicles eight years ago were the Ford F-150 and the Chevy Silverado, which will likely be the most commonly traded in, according to veteran auto analyst John Wolkonowicz at IHS Global Insight (Stock Quote: F).
For example, the four-wheel drive version of a 2000 Ford F-150 pickup gets only a combined city/highway fuel economy rating of only 15 miles per gallon, according to fueleconomy.gov.
In 2001, 911,597 Ford F-Series vehicles were sold, and that same year, GM sold 716,051 Chevy Silverados, according to the companies.
The popular Dodge Ram and GMC Sierra will also be popular trade in “clunkers,” Wolkonowicz says.
Least Likely Trade-Ins
Since most sedans and compact cars – even many of those made 10 or 20 years ago - get more than 18 mpg, they’re not likely to qualify for the trade-in program, notes Wolkonowicz.
And those who are still driving around old gas guzzlers might not even have the money or want to take advantage of the program anyway.
The voucher is only good toward a brand new car. And of the sedans that do qualify, you might actually get more if you sell the car rather than trade it in.
For example, an eight-cylinder 2004 Lincoln Town Car, which gets 18 mpg, but it’s generally worth more than $4,500, Wolkonowicz says. “No one would give it away for $4,500 if they could sell it for more.”
On the opposite end of the spectrum, a Mercedes enthusiasts driving a 1994 Mercedes S-Class aren’t likely to trade in their treasured though low-gas-mileage car, Wolkonowicz says.
And while many minivans have EPA ratings of more than 18 miles per gallon, a 1994 Dodge Caravan, for example, gets only a combined 17 miles per gallon and would qualify for the program. (Whether a person driving a 15-year old Caravan can afford a new car, even with $4,500 off, is another question.)
In addition to your trade-in getting 18 mpg or less, it will have to be less than 25 years old before the date of your trade-in. It also has to have been registered and insured continuously for the past year.
Your new car has to be brand new, meaning the legal title has not been transferred to anyone but you. It also has to have a retail price of $45,000 or less, and leased vehicles must be leased for at least five years.
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