Cash For Clunkers Program -  A Clunker?

Photo by: Tracy O.

Driving an old car your friends affectionately call a "clunker"?

I had one back in the day. A '77 Grenada stick with a cracked windshield. My wife detested it. My friends mocked it. And when I finally sold it to a salvage yard in Wichita, Kansas the guy running the place chuckled, and gave me $25 (I took my wife to lunch with my handsome profit).

Looking back, I wonder if my Grenada would qualify as a clunker under the new "Cash for Clunkers" bill. The bill would give people a voucher for $3,500 to $4,500 if they turn in their old car or truck for new fuel efficient model built in North America.

On paper it sounds good. In reality, the number of people who may actually benefit from this program could be extremely limited.

Edmunds.comhas been highlighting the fact the current legislation requires people to own a clunker (vehicle averaging less than 18 miles per gallon) for at least year. In addition, if you can get more than $4,500 selling your clunker, then what's the incentive to try and go through a dealer for the clunker program, as opposed to just selling it on your own.

This "Cash for Clunkers" bill is evolving into one of those pieces of legislation that politicians will crow about as a sign of progress, but the impact could be limited. It appears the number of car owners who "fit the profile" of being eligible to take advantage of the program is pretty narrow. Could that change as gas prices move higher and people driving gas guzzlers look to bail out? Maybe.

The bottom line: if you thought the clunker bill would be one of those "one-time" events that could dramatically impact the auto industry, don't get carried away.

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