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With pressure from environmentalist to get gas guzzlers of the road and provide consumers with cleaner, more efficient vehicles the government has introduced the Cash for Clunkers program. It really is a hugely successful program any way you look at it. It has replaced thousands of gas guzzling, high pollution vehicles. It has also saved the jobs of thousands of employees working at dealerships across the country by stimulating sales. So, if you're considering trading in your old clunker for a new Toyota Prius or Ford Fusion, here's how it works.

The idea is simple, you need to have a car that was made in 1984 or newer, was manufactured with a combined MPG of 18 or worse, has been registered and insured in your name for the past year and is currently running. You can then trade that car in for a new car (must be brand new) that is made to get an extra four miles per gallon and receive a $3,500 credit toward the purchase of the new car. If the new car gets ten miles per gallon over your clunker, you then get $4,500 toward your new car. Sounds like a great plan, right?

The downside is the fact that the plan offers an incentive to purchase a more fuel efficient car, not necessarily a high fuel efficiency car. It would be very easy for someone to trade in an old pick up or suv and get a new truck or suv of the same make and model and still qualify for the voucher. Furthermore, financial experts are saying that, although it will save money over the cost of a new car, consumers are still paying more in the long run than they would for a used car. It has long been advised to buy a car that has ten thousand miles on it and save money. The average person could save upwards of $10,000 buying a slightly used car and trading in their clunker at it's blue book value.

With that said, the program has done and will continue to do exactly what it was designed to do. It has saved jobs, generated sales and replace old, ugly cars with more appealing, greener cars and trucks. Despite warnings from experts, it appears the senate will continue the program as long as it continues to boost auto sales. The senate and Obama are doing everything they can to generate sales and boost the economy. This plan has been the most productive part of the stimulus plan. With the politics getting in the wa of nearly every other bill submitted to congress or the house of representatives, this is one of few projects that have benefited a large number of people. It has been so successful that the Senate has already passed one extension and are waiting for funds to be approved to finance a longer extension. Some groups are fighting for amendments that would force people to buy cars with high rated MPG such as the Toyota Prius, the Honda Element or the Ford Fusion.

Learn more about this author, John Mckinsey.
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