"Cash-for-clunkers" program aims to drive up car sales

Driving a clunker? Or at least an older-model, gas-inefficient vehicle? Congress has approved a "cash-for-clunkers" program, designed to get fuel-hungry cars off the road, and--more to the point--get more people into car dealerships to buy new cars.

If your vehicle qualifies, it could mean a $3,500 or $4,500 voucher toward the purchase of a new, more fuel-efficient vehicle.

The program will run until Oct. 1, or until a $1 billion limit in vouchers is reached. Here's how it works:

•Passenger-car owners could get a $3,500 voucher if they trade for a new car rated at least 4 miles per gallon higher or $4,500 if they buy a car that gets 10 mpg more. Cars from 1984 or newer with combined mpg ratings of 18 or less are eligible. 

•SUVs, pickups or minivans 1984 or newer that get 18 mpg or less could earn a voucher for $3,500 if their new SUV, truck or minivan gets at least 2 mpg more than their old vehicle or $4,500 if the new truck or SUV gets at least 5 mpg more. The vouchers are sent electronically and directly to the dealerships.

The owner of the trade-in must have owned and driven it at least a year, and it must be drivable. Dealers must provide assurance the trade-in then is scrapped. The program is aimed at replacing older vehicles, so it would not make financial sense if your car has a trade-in value of great than $3,500 or $4,500. One article noted that it works best for cars about 8 years old or older.

To check how your vehicle stacks up on fuel economy, go to this fueleconomy.gov website to find your make, model, and year.

Is this the kind of program that would make it attractive--and possible--to purchase a new car?

[Source: USA Today]