Cash For Clunkers Ends Monday: Here’s Why I’m Keeping My Clunker

by Millionaire Mommy Next Door on August 20, 2009

in Economy

Quick and sloppy post here — I have timely news and advice but only 10 minutes to share…

The Cash for Clunkers program ends on Monday, but I won’t be spending my weekend tramping through car dealerships. Here’s why:

  • My clunker is worth more $ now because so many cheap cars have been destroyed. I won’t have any trouble selling it for a nice price, by owner, later.
  • It’s no deal to buy a brand new car … then pay for the instant depreciation that occurs as soon as you drive it off the parking lot. For the best deal, I buy my cars when they’re 1-2 years used, still under warranty, after the original owner has paid for the initial depreciation hit.
  • Yes, it’s a gas guzzler, but we drive only 10,000 miles annually. It would take a loooong time to hit the breakeven point between the gas savings and the extra expenses associated with buying a new car: purchase price, increased registration fees, higher insurance premiums, etc.
  • Like everything else we own, we have taken excellent care of our clunker. It’s clean, reliable, comfortable and still looks great. Frankly, I couldn’t bear to think of it being destroyed!
  • Once the Cash for Clunkers program is over, new car prices will likely come down for other reasons — namely, lack of buyers. Therefore, I’m not worried about missing out on a “good thing”. New car prices going DOWN due to lack of buyers AND used car prices going UP due to lack of cheap cars = A BETTER DEAL LATER.

My advice? Evaluate your finances and transportation needs carefully. If you were planning to buy a new car regardless of the program (and the expense), fine, go for it. But if you have a good ‘ol clunker like mine, avoid rash decisions.

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