Cash for Clunkers: You Guys Should Have Listened

FordEscape After receiving the final numbers from the Cash For Clunkers program, we decided to see how our suggestions for replacement cars fared against what Americans bought in the program. Unfortunately, not well. Only two of the Top 10 cars bought with the government incentive were our picks: the Toyota Prius and the Ford Escape.

Even though the government offered to cut up to $4,500 from the selling price, it seems that our picks were a little too expensive to make the list. Our top five cars had an average MSRP of $19,050, while the top five cars the nation bought under the Clunkers program averaged around $15,900.

Although more expensive, the Prius seems to make up for its higher price with its fuel efficiency, boasting 48/45 mpg city/highway. At least we suggested the only SUV on the top 10 list, the Ford Excape scraped by at No. 10.

Editor’s Note: On her last day in the office, intern Lauren Makholm authored this post on’s Cash for Clunkers advice.

By Stephen Markley | August 31, 2009 | Comments (7)


Juan Carlos

maybe they were gas guzzlers and didn't make it to the 10mpg for the rebate. also, incentives and other factors were part of it. throw in credit and lending and you have a reason. pontiac vibe was one of your picks and people may not want a car that is going out in less than a year.

Well another thing not mentioned was some of our picks were limited in scope. So a mini cooper couldn't be a top trade-in because they simply don't sell/make as many as other vehicles.


How about this little tid bit that wasn't mentioned about the CARS program. Your rebate is considered regular income for tax purposes.

That is completely inaccurate as was spelled out many times during the program.

Never underestimate the velocity vector of internet (or talk radio) rumors.

Well, I would think that most people trading in on the Cash for Clunkers were either doing it to maximize the value of their trade-in, which be definition was a clunker, and so couldn't really afford a whole lot as far as new cars go. Even a $15,000 loan for a $19,000 car is alot of if you've been driving a 10 year old Ford Explorer. More over, there were reports that dealers were raising the prices of the popular cars by $5,000 over what they were selling them before Cash for Clunkers.


Two points regarding taxation of CARS rebates

1. When you trade in a car the trade in amount is deducted from the selling price to calculate the sales tax owed. The CARS program is a rebate and does not reduce the sales tax liability. So buyers are paying the sale tax on the rebate amount.

2. Some STATES are taxing the rebate as part of gross income.

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