I heard that there was a new program that would give me some money if I got rid of my old car. How does that work?
Wes
Wes, I presume that you are talking about what has been called the "Cash For Clunkers" program. The cash for clunkers program will officially start in late July, after the feds issue regulations. Once it opens, if you trade in a car with an EPA rating of 18 miles per gallon or less, you will receive a $3,500 credit at the dealer to buy or lease a car rated at 22 mpg or more. The credit is in lieu of any trade-in.
You will get $4,500 if the replacement gets at least 10 mpg more than your old vehicle. For light trucks and sport utility vehicles, the fuel efficiency rules are significantly more lenient. To qualify, your trade-in must be a 1984 or newer model that’s in drivable condition that you have owned and insured for at least a year.
Larry Kopsa CPA
