Cash for clunkers is a con. It's just about as bad as Chrysler's $1.99 gas. Here's why:
A lot of these cars have a KBB over $4500. since the law states the cars are to be dismantled, dealers have an incentive to not scrap the car, but to resell them for greater profit. So Joe Consumer takes his car for trade, gets screwed on the trade-in value by the dealer, and the dealer resells or sends the car to auction for greater profit. Before you trade your car in, see what
www.kbb.com says is a fair value for trade and resale. If it's greater than $4500, have the dealer give you that figure instead of the CFC value. I know the dealers are hurting, but giving them an amount set by the federal government takes away bargaining chips from the consumer.
Or as other people have noted, unless your car is absolutely on it's last legs and needs to be replaced, keep it for another 2-3 years and use the money you would have used for a car payment on repairs, or bank the cash. Repair money goes directly into the local economy vs profit from a car sale going to national dealers and international manufacturers.