Chrysler just announced that they are doubling the incentive for the Government’s cash-for-cars program aka. Cash for Clunkers.  Maybe you’re more familiar with it’s official name: the Car Allowance Rebate System. The combination of Chrysler’s new incentive and the Government’s program gives buyers up to $9000 towards the purchase of a brand new car. Sounds good, right?

Unfortunately, the double incentive isn’t all it’s cracked up to be, and this MotorTrend article explains why.

If you don’t have the time to read the MotorTrend article, these are the points that you need to know before you get all excited and zip on down to your nearest Chrysler dealership.

To qualify for the Cars for Cash Government incentive:

• You need to have an old vehicle that gets 18 mpg combined or less

• You need to purchase a new car that gets at least 22 mpg combined

*OR*

• You need to purchase a new truck/SUV that gets at least 18 mpg

***There are also more terms and conditions that need to be followed, please see Cars.gov for the full details***

Chrysler will also give you a $4500 rebate on a new car that gets at least 10 mpg better fuel mileage than the one that you trade in. (The rebate is lowered to $3500 if you trade in a vehicle that gets 4-9 mpg better or trucks that get 2-4 mpg better)

To qualify for the Chrysler incentive to purchase a new car→Your old vehicle needs to get 12-18 mpg combined

To qualify for the Chrysler incentive to purchase a new truck/SUV→Your old vehicle needs to get 13-18 mpg combined

If you do the math, you don’t have too many options to receive the double incentive.

To purchase a new car, and your old vehicle gets:

17mpg or less→ your only option is the Dodge Caliber
14mpg or less→your options are the Chrysler Sebring or Dodge Avenger (four cylinder)
13mpg or less→you can get the PT Cruiser

To purchase a new truck, SUV or minivan, and your old vehicle gets:

18mpg or less→your options are the Jeep Compass or Patriot
13mpg or less→your options are the Dodge Nitro (2WD), Jeep Liberty (2WD), or Grand Cherokee (2WD)
15mpg or less→your options are the Chrysler Town and Country or the Dodge Caravan
13mpg or less→your options are the Dodge Dakota (V-6), Dodge Ram, or Sprinter van

Of course, there are a lot of options and fine print to read before you move forward with this deal, like making sure that your trade-in is not worth more than $4500. The $4500 is essentially your trade-in money, so if your car is worth more than $4500 you‘re losing money on the deal. You also need to be aware that most of the new vehicles that qualify are the lower end models, for example those with smaller engines. So, you need to be sure that you’re OK with that. And, finally, you need to determine if you’re comfortable purchasing a car from a company that just emerged from Chapter 11 bankruptcy.

Regardless, it’s possible that you could drive away in a Dodge Caliber SE for less than $8000. This could be a great deal for a family who needs a new car now.  The Chrysler incentive expires on August 31st and C.A.R.S. expires on November 1st or whenever funding runs out, whichever comes first.

-Melissa

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