I traded in "Gerty," an old Explorer. She had 160,000 miles on her, leaked oil, made lots of strange noises, suffered body damage, and flashed her check-engine light often. Gerty had been for my daughter Cammie to use at college.
I got a lot of $500 phone calls from Cammie: this broke, the car needs that. I was going to get her a used car, but Cash for Clunkers made it possible to buy a new Elantra. It was an absolute no-brainer. The sticker price was $17,500, and I paid $10,500.
My advice: Make your best deal without the trade-in. Then mention the Clunker program. That's where I got the dealer to take off another $500. Hyundai also threw in a $2,000 incentive. I couldn't walk away from that.
It worked out for me. But this is really just a loan against the future -- the money will have to be accounted for someday, so I'd like to thank all the other people in the country who helped my daughter get a new car.