Let me say right off the bat that I don't agree with this program. First, a car that's still worth $4500 isn't a clunker. A clunker is a car that looks bad, runs bad, and costs more to maintain than making payments on a new car.
Secondly, I would never recommend that anyone buy a brand new car. A good part of the value is lost the moment you drive it off the car lot. If you buy a car for $30,000 and it loses 10% of its value in the first 30 days, there goes a third of your "cash for clunkers..."
Most people will have to finance a new car. If you do, DON'T think that you're paying the sticker price for the car. Multiply the amount of the payment times the number of months you have to pay and that's your real price.
There's another reason. If these "clunkers" are destroyed, what do people who need to drive older used cars find to buy? Bus tickets? That may be great in Washington D.C., but it isn't very practical if you live out in the country, or your city doesn't have good public transportation, which pretty much covers the rest of the nation.