The Clunker Debunker

Chrysler's bankrupt, and Pontiac's going bye-bye. GM's on eBay, claims its Chevy Volt will get 230 m.p.g. and boasts that a $4,000 compact is in the works. Volkswagen is merging with Porsche. TV car guys with names like "Dealin' Doug" are screaming about incentives this and rebates that. And the government's porky cash-for-clunkers effort is ridin' herd on gas hogs.

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So does that mean it's a good time to acquire a vehicle?

If you're not financially underwater, the answer is probably yes, according to industry experts and recession-whipped car sellers, who point to low-interest loan rates, government givebacks, manufacturer come-ons, desperate dealers willing to haggle and the specter of rising prices down the road. (See the most exciting cars of 2010.)

Auto sales couldn't be much slower, and the near future isn't looking that much better, says Bruce Rapp, who sells GM cars, Subarus and Jaguars in Syracuse, N.Y. "There's incredible change going on in our industry, and it hasn't shaken out yet," he adds.

That uncertainty is translating into savings. But before you put yourself behind the wheel, ask two big questions: Should I get a new or a used car? And should I lease or buy? The experts' short answers are the same as they've always been: it depends on your finances, what you want from a vehicle and your number-crunching acuity.

Buying a new vehicle carries several advantages. Beyond the intangibles — billboarding your economic status, that new-car smell — there's always a great selection of vehicles across all price ranges. You can customize features and technologies (Bluetooth phone systems, iPod terminals, etc.). You can drive the vehicle as long and as hard as you like. And you gain equity as you pay down your loan.

Then there's the current-day math. A good many carmakers — among them VW — are offering no-interest loans for new cars, while others are advertising rates ranging from 1.9% to 3% for 24-, 36- and 60-month loans. (Compare that with the 5%-to-6% rates for used cars.) "This has been some year," notes Craig Rosenfeld, founder of the Vision Auto Group in Leesport, Pa., which sells Porsches, Audis and VWs. "There have been a lot of changes in marketplace dynamics, in buying habits, sales strategies. We're seeing a lot of traffic, a lot of interesting things happening."

Combine manufacturer rebates, dealer incentives and cash-for-clunkers rebates of up to $4,500 (which end in November), and there are some huge deals out there. The $16,000 list price on a 2009 Nissan Versa at Boulder Nissan in Colorado can be whittled to under $10,000. A buyer could drive off with a new $18,000 Pontiac Vibe from the Bill Rapp Super Store in Syracuse, N.Y., for $10,000 if he or she does the numbers right. And Lakewood Fordland in suburban Denver will conceivably trim up to $17,000 off a loaded 2009 Ford F250 XLT listed at $49,223.

Watch TIME's video "The Secrets to Cash for Clunkers' Success."

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