Make sure the vehicle you plan on trading in is not worth more than the $4,500 rebate allowed by the CARS program. Check with the dealer or the Kelly Blue Book's used-car-pricing guide to see where your clunker falls on the value scale. Bottom line: the dealer can give you a clunker rebate up to $4,500 plus a small sum to reflect the car's scrap value. If your car is worth more than that it's not a clunker, it's a trade-in. Further, any 2009 models bought today will depreciate quickly at first because the 2010 models are arriving. Make sure that impending depreciation is reflected in the price.
Now comes the hardest question: Do you really need a new car? The Automotive Aftermarket Industry Association of Bethesda, Md., which represents companies with a stake in car repairs, observed that "routine vehicle maintenance for an entire year costs a consumer less than a single monthly new-car payment." Sure, that organization may be a bit biased, but the truth is that just because something is on sale doesn't mean it's a good deal.