As many of you may know, there is a new program out there which will allow you to receive up to $4500 from good ole Uncle Sam for trading in your old inefficient car or truck. Here are a few details of the program, you can read the complete bill here.
1. Must be registered and insured for 1 year.
2. Must be newer than 1984 (Classic car nuts rejoice, nobody will be trading in grandmas 1957 Chevy)
3. Must be rated at 18 MPG or below. (Read bill for calculation formula)
4. Will be destroyed. The dealership MUST disable the engine by removing oil and replacing it with a Sodium Silicate solution which will burn up the bearings and seize the engine plus leave a coating in the block which will make saving the engine for rebuild economically unfeasible. Your car is then taken to the scrap yard and crushed.
5. You will only get scrap value ( -$50 for the dealer to use for administrative costs)
Your New Car or Truck
1. Must be financed (or purchased outright) or leased for a 5yr. or longer lease period.
2. Cars must achieve a rating of 22 MPG or above, trucks are 18 MPG or above.
3. Depending on the difference in MPG between your trade-in and new vehicle you may receive $3500 or $4500. 4 - 9 MPG difference you get $3500, 10 MPG and more you get the full $4500.
4. Must have a base MSRP (before add-ons, options, taxes, tags etc.) of $45,000 or less.
So is this good for the country, the economy, and the environment? I guess its up for debate. Many lower income americans have never had the money to buy a new car, they rely on cheaper vehicles for their transportation needs, this program will reduce the number of older, more affordable vehicles on the road. A bad thing in my opinion.
As for the environment, what is the impact of manufacturing a new vehicle, and scraping an old one? Weigh that with the increased emissions of leaving that old clunker on the road. I dont know the answer to this, but with any environmental question, there are always way to many variables that people do not take into account.
As for the economy, yes more cars will be sold, but now we will have more people with car payments, as well as less older cars on the road for people who can not afford a used car.
I guess the bottom line is that if you were in the market for a new car, and have an older clunker that you are driving, this may be an easy way to get $4,500. Just remember, your car will be destroyed, you will only get scrap value for trade-in (this effects taxes at time of sale) and you probably wont be helping the environment that much.