The return of a Cash for Clunkers program is bound to have many motorists eyeing that old bucket of bolts in the driveway and figuring out whether or not it will be worth the time and effort to take advantage of this perk.
In 2009, the Cash Allowance Rebate System gave owners of 25-year-old or newer cars up to $4,500 to scrap them in favor of new, more fuel-efficient vehicles. A few caveats: The car or truck had to be in running condition and have a fuel economy rating lower than its replacement. This time, the program may encourage the switch to electric vehicles.
Once you’ve figured out whether or not your car qualifies, the next step is to determine if, indeed, your clunker is a good candidate for the program based on some factors unrelated to the program’s criteria.
Here’s a look at the Good, the Bad, and the Ugly clunkers.
A good clunker is a car that no one, not even you, wants. If there’s little or no demand for your car, you can be sure that you won’t get much for it from either a dealer or a private party. And the $4,500 rebate could go a long way toward a downpayment on a new car.
Among the factors that work in a vehicle’s lack of desirability is its poor running condition. Getting your vehicle to limp to the dealership with the least amount of out-of-pocket expenses is the play here. It’s like crossing the finish line at the Indy 500 and having the wheels fall off.
Your car also may be borderline serviceable. You may want to figure out how much you’ll have to spend to keep it running over the next several years and enter that into the equation of whether or not to turn it in as a clunker.
Another big consideration is the make of your car. A lot of brands have disappeared over the past decade or so. Makes like Oldsmobile, Plymouth, Pontiac, Mercury, Saturn, and Saab are gone. Some of their cars may have value; most don’t. And replacement parts, especially body panels and interior bits specific to the marque, are getting harder and harder to find. So, you owners of Oldsmobile Alero sedans, it’s time to move on.
It’s counterintuitive, but the bad candidates for Cash for Clunkers are good cars. A well-maintained vehicle in good running condition is not good fodder for the program. Its usefulness translates into resale value, and the more you can get for your clunker, the less attractive the $4,500 rebate. And, if other cars of the same vintage in worse shape get turned in, your vehicle will likely grow in desirability.
Along these lines, if you’ve put a lot of money into your car, you won’t see a return on things like new tires, brakes, and other major repairs that can give your car additional life. Remember, the goal of the program is to rid the roads of clunkers. That means your car will be scrapped and, along with it, anything you’ve spent money on to keep it running.
Some really old cars that may not appear to have much value may be worth more than you think. These cars could come from an unusual make — in this case, a defunct brand may add value. Or it could be a vehicle on the verge of being hot if it’s “discovered” by young enthusiasts. Radwood ’80s American iron and Japanese economy cars are two genres that come to mind.
What about a true clunker? That car that doesn’t run and is just taking up space in your driveway or garage. A $4,500 rebate on that old hulk may be tempting, but the real question is how to get it running again. The answer lies in doing some diagnosis and accounting in equal measure.
The first step is to determine the problem and what it will take to get the vehicle running. It could be something as simple as a new battery, a starter, or a fuel pump. These repairs usually run hundreds of dollars, making it a worthwhile expense relative to the payoff. Remember, the clunker only must run well enough for you to register, pass a smog test and drive under its own power to the collection point
Bigger problems like engine or transmission issues usually require thousands to resolve. If it takes that kind of money to get your clunker rolling, then it’s probably not worth the time and effort to make it happen. You’re probably better off pocketing whatever scrap value you can get.