I'd heard rumblings about this government incentive to rid the roads of gas-guzzling rides for the past couple of months, but there was no official announcement until just recently. It turns out that the start date for this program was on July 1 and it will be in effect until November 1 or until the $1 billion set aside for this program runs out (whichever comes first).
In short, the Cash for Clunkers (officially "Car Allowance Rebate System" or CARS) program is a government stimulus package that essentially provides a rebate to any person trading in a car that gets a combined (hwy and city) fuel economy of 18 mpg or less. The rebate amount you get depends on how many miles per gallon the new car that you buy gets compared to your old "clunker". Buying a car that gets more than 4, but less than 10 mpg more than the car you're trading in yeilds a $3,500 rebate. Should your new car have a combined fuel economy of 10 mpg or more than the car you're trading in, you will receive a rebate of $4,500.There are some restrictions, but cars.gov does a great job of answering a bunch of questions you may have. One caveat is that this only works with new car purchases. There are also some limitations with particular work trucks. I encourage you to do your own research if you think this a good idea.
Now that all of the technical stuff is out of the way, I get to the point of this blog post. Should we trade in The Love Boat for a couple grand towards a new car? More specifically, a black 2009 Honda Fit Sport with a manual transmission, some flashy rims and a thumpin' stereo? Raise your hand if you're ridden with me lately and have heard the "doo-doo bass".
I did the math and found out that our trusty old van gets 18 mpg (even the original listing when the car debuted says 18 mpg, combined). The Fit gets an average of 31 mpg. That's roughly a 55% increase in fuel economy. (31 / (18 - 1) = % difference) So, if we currently spend $150/mo. on gas for the van (we like to travel), then I could assume that we'd be spending $82.5/month on gas. Wait...is that right? Somebody help me with the math. I manage projects for a living now. My math skills have gone out the window. Assuming that's correct, we'd be saving $67.5/month...minus the monthly cost to actually pay for the car.And therein lies our dilemma. All the numbers out on the table and we're probably looking at around $100/month to own a spankin' new Honda Fit Sport (and helping out the environment that much more). Oh yeah, the cool thing about the "cash for clunkers" program is that the car you trade in MUST be sent to a scrap yard and "...be crushed or shredded so that it will not be resold for use in the United States or elsewhere as an automobile." Kinda hard to stomach the thought of that happening to the van, but it is nice to know that we were the last ones to drive it and that the terrible emissions from that car will cease upon selling it.
So, with all of that said, I'm asking for your help and your opinion. What should we do? If you were in our situation, with a van worth (maybe) $1,000 and over 260,000 miles, would you pull the trigger on the new car and take advantage of this rebate? Whatever your answer, tell me why you think what you do.
