>> If you're looking to replace your old car with a new one, the government's Cash for Clunkers program may be the thing. It starts today, and it's designed to boost new auto sales and get gas guzzlers off the road. But there's a lot that you may not know, and CBS MoneyWatch editor at large Jill Schlesinger is here to fill us in. Good morning.
>> Jill Schlesinger: Good morning. So we have a clunker here, which people at home will say, it sure doesn't look like a car that's, you know, about to give up. But here's the deal: it does get less than 18 miles per gallon. That's kind of the definition for the clunker. Gotta get less than 18 miles per gallon. So if you want to trade in one of your clunkers and get a new car, the government will give you some money. 3,500 dollars if you improve the efficiency by 4 miles per gallon, and 4,500 dollars if you improve it by 10 miles per gallon. So it seems like a good deal, right?
>> But they're not going to give you 4,500 dollars.
>> Jill Schlesinger: No, they are not.
>> They're going to say this is a credit towards a new car.
>> Jill Schlesinger: Exactly, and so what you have to remember, there are, what we've identified at MoneyWatch is five things you've really got to look for, okay?
>> A lot of people don't know these things.
>> Jill Schlesinger: Exactly. And so here's number one: number one, you really have to have a road-ready car. This can't be something that's falling apart that looks like it fell off a lot. So that's important. Insurance in your name for a year. The other thing is, it has to be less than 25 years old. I mean that's a pretty big --
>> Mm-hmm --
>> Jill Schlesinger: -- wide berth --
>> Mm-hmm --
>> Jill Schlesinger: -- for us to get through. When you buy a car, it has to be a new car, not a used car. If you choose a lease for that new car, has to be a five year lease, and that's a pretty long lease for folks. And here's the other thing, has to be less than 45,000 dollars. So no fancy cars on the Cash for Clunker deal.
>> Even so, somebody who's been driving a clunker, even with the 4,500-dollar discount, may not be able to afford the new payments for a brand-new car.
>> Jill Schlesinger: Yeah, that's probably one of the real downfalls of this: that if you're really driving an old car, you really have to factor in what's right for your family, can you really afford it? There are three other things that are really important in this process: number one, your clunker should be worth less than the rebate, right? Because then otherwise you just go into the open market, sell your car, get cash in your pocket, and go buy a new car.
>> Exactly.
>> Jill Schlesinger: Number two, you go to your dealership and you bargain, you don't tell them about your clunker. You get a really good price first. This is a buyer's market for automobiles. Number three --
>> So negotiate the best price before you even talk about trading in.
>> Jill Schlesinger: Exactly: Oh, did I tell you about my clunker? Great.
>> Got it, got it.
>> Jill Schlesinger: The last thing that I think is kind of important for people to think about, and you know, there's a lot going on here, but when you look at your whole package, you are seeing a lot of dealer incentives. Chrysler just announced they're going to match the rebate. So that may, you may not think oh, I want a Chrysler, but if you're going to end up with 9,000 dollars off the price of the new car, it may be worthwhile for you.
>> Could be worth your while. Jill Schlesinger, thanks so much, and we're going to put all this information on our website, earlyshow.cbsnews.com, and we'll also link you to the official Cash for Clunkers website, which will help you figure out the miles per gallon in your clunker.
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