Maximizing Your Clunker's Potential
Detroit measures muscle in how fast it takes to accelerate from 0 to 60 m.p.h.; by that gauge the government's cash-for-clunkers program (formally known as the Car Allowance Rebate System) ranks right up there with a turbocharged Corvette.
Though it took the Department of Transportation a month to right the rules, once it got going the clunkers program quickly burned through more than $800 million of government cash and helped sell roughly 250,000 cars at retail. Congress felt a bit of whiplash as sales took off, but then quickly pumped another $2 billion of funding into the program to take it to November 2009.
Though deficit hawks are unhappy about the government's largesse, supporters of the clunkers program say it helps save fuel, clean up the environment, stimulate the economy and bring some stability to an industry rocked by the financial crisis. Though some may take issue with the environmental claims, the boost to automakers is already in the books. Companies such as Chrysler, Ford and Toyota (which recently posted a $4.4 billion loss for its fiscal year) now report that their inventories are at the lowest point since the middle of the decade.
That's good news for automakers, but it may slim choices — and deals — for consumers readying to drag their old clunkers out of the garage. And there are plenty more of those — Americans own some 250 million passenger cars, with a median car age of 9.4 years as of 2008, according to figures from R.L. Polk & Co. of Southfield, Mi.
Click here to see five tips for making the most of Cash for Clunkers 2.0.