The government’s Car Allowance Rebate System—the “Cash for Clunkers” plan—goes into effect today, but it might not be such a good deal for you or the environment, Elisabeth Leamy and Nathalie Tadena write for ABC News. New-car buyers who trade up more than 4mpg in mileage get $3,500; make it 10 mpg and you get $4,500. But you could also skip the credit, buy a perfectly good used car, and save more than $10,000.
The criticisms are various: Some say CARS “could end up being a subsidy for big SUVs and trucks,” while environmentalists point out that there’s no sense in sending perfectly serviceable vehicles to the junkyard. But the consumer argument is perhaps most persuasive. New cars depreciate rapidly, 45% in just 3 years. “If you are bent on buying brand-new, you will save money,” Leamy and Tadena write. “But the savings are nothing compared with how well you can do by buying a used car.”