auto

Is 'cash for clunkers' right for you?

Editor's Note: On Thursday, Aug. 20, the Department of Transportation, or DOT, announced that the "Cash for Clunkers" program will conclude Monday, Aug. 24 at 8 p.m. EDT. The DOT advised dealers to only conduct transactions under the program with consumers who have all of their paperwork ready to submit to the dealer during the transaction, as dealers will only have until Aug. 24 to submit completed applications for reimbursement. Consumers can review the program's requirements at 6 Steps to Cash for Clunkers.

Tara Baukus Melloq_v2.gifDear Driving for Dollars,
I own a 1999 Chevy Tahoe that's in great shape, but I'm thinking about getting something new since it's a gas hog. Should I get rid of it under the "cash for clunkers" program?
-- Walt

a_v2.gifDear Walt,
First, you need to learn your vehicle's EPA-estimated fuel economy by visiting Fueleconomy.gov to see if it's a gas guzzler by the Car Allowance Rebate System definition. Next, you need to calculate the trade-in value of your car using a vehicle pricing site such as Kelley Blue Book or NADAGuides to see if it's worth the $3,500 to $4,500. That's the amount you'd be getting if you participated in the program, depending on the vehicle you buy.

I did some quick research on your Tahoe using the limited details you provided. It qualifies from a gas mileage and age standpoint, but you are right on the cusp of whether the "Cash for clunkers" program makes sense for you.

If your Tahoe is truly in excellent condition and is on the lower mileage side, then it's worth about $3,200 at most if you trade it in, but about $4,300 in a private party sale. It's possible that you could make slightly more than what you'd get in the cash for clunkers program if you sell it yourself, though that depends largely on the market in your area.

Of course, this approach requires you to place an ad, answer questions from prospective buyers and take people on test drives. The extra effort may make it more desirable to get the guaranteed cash for clunker money. It is almost assuredly more than you would get if you traded it in at a dealership.

If you have a car question, e-mail it to us at Driving for Dollars.

News alert Create a news alert for "Cash for clunkers"

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
 

A little research could save you BIG on interest.

Don't have time? Our rate-tracker tool saves you time and money. Delivered Thursdays.
 
advertisement
Partner Center
advertisement

Blog

Tara Baukus Mello

Save money on gas over Labor Day

Wal-Mart has jumped on the gas savings bandwagon with its Great Gas Rollback program.  ... Read more


Connect with us