Will Cash for Clunkers Help You Buy a New Car?

Who Really Benefits
The consumer benefitting most from cash for clunkers might have two or three cars, says Mike Jackson, director of North American vehicle forecasts for automotive market research firm CSM Worldwide. He or she would have a vehicle that qualifies for a trade-in, plus the means to buy a new car or be approved for a lease, which is becoming increasingly difficult, Jackson says.

“You’re going to have some well-to-do families that have three or four or five cars who will take one and trade it in to get a new car for one of the kids,” Wolkonowicz says. Jackson adds that many of thos families are "delaying or postponing their decision until the program is approved."

All in all, the program likely won't help those most in need of a new car.

One Possible Change Could Save Folks More

Under another option proposed by Sens. Dianne Feinstein of California, Susan Collins of Maine and Charles Schumer of New York, the voucher would apply to both new and used cars, as long as it has better fuel efficiency. Under this alternative, you would get a $1,000 voucher if you trade in a 17 MPG or less vehicle for one that gets at least 24 miles per gallon. In order to qualify, the used car purchased would have to be a 2004 model or later. Light or heavy duty truck trade-ins would have to get 17 miles per gallon or less and be traded in for a three miles per gallon improvement.

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