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July 20, 2009

Cash for clunkers

There's now a new government program designed to both help the economy and the environment. It's the Consumer Assistance to Recycle and Save Program, better known as Cash for Clunkers. Briefly describe for us how it will work. Listen

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"You must buy a new vehicle between July 1 and Nov. 1 of this year, and depending upon the improved gas mileage between the new vehicle you purchased and your old vehicle, you can get either a $3,500 or $4,500 voucher from the government to help offset the increased price. Now when you combine that perhaps with incentives provided directly by the dealer, you're talking about potentially a large amount of money being reduced off the sticker price. In terms of comparing the fuel efficiency, what you would use is the miles per gallon posted on the sticker of the new vehicle, then you would go to a Web site to get the miles per gallon for your existing vehicle. That Web site is run by the Energy Department. Here, however, is a big, big factor you need to be aware of. You're not going to get any trade-in value for your existing car. In fact, what's going to happen under this program, your old car's going to be taken and destroyed. So what you have to do clearly is compare that $3,500 or $4,500 voucher to what you could get by just simply trading in your vehicle to see if this is a good program for you."

Posted by Dave at July 20, 2009 08:00 AM