Should You Trade in That Clunker?

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The federal government’s Cash for Clunkers program officially began today, but the ridiculous car dealership ads encouraging you to “get rid of that old jalopy” have been airing for some time now:

 

Nevermind that the Model T shown above gets better gas mileage than many of Detroit’s newest offerings. With so much Madison Avenue labor dedicated to trashing old cars, you could be forgiven for feeling a bit of an econundrum: Buy a new car with lower emissions? Or don’t, and save the energy needed to manufacture it? Last year, we looked into the question and came up with this rule of thumb: If your car gets more than 25 mpg and you don’t drive much, you’re better off keeping it instead of buying something more efficient. Fortunately, Cash for Clunkers only allows trade-ins for cars that get less than 18 mpg. Does that make the program the best use of government money? Probably not, but compared to a lot of other subsidies to banks and automakers, it’s not all that bad.

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