• Aug 17, 2009
Cash for Clunkers is good news for people looking to trade in their old cars for new ones. It's good news for America's troubled car dealers. It's good news for automakers. And it's good news for auto workers, some of whom have been called back to work on assembly lines ramping up to meet demand generated by the initiative.
But with every upside, there are downsides, both predictable and otherwise. That appears to be the case for America's needy citizens according to a new report by Reuters. Not because the poor, elderly and disabled war veterans are driving around in old cars, but because the charitable organizations that once relied on the donation of old cars to sustain their activities have seen a marked drop in the number of old clunkers being donated, as their owners are apparently opting for government-sponsored trade-ins instead.

One veteran's aid organization, the Military Order of the Purple Heart, estimates that the $3 billion allocated overall by the federal government towards the C4C program – known officials as the Car Allowance Rebate System (CARS) – amounts to some 700,000 vehicles, which could cost charities like theirs some $105 million in donated vehicles. The lost income will mean that charities will have to cut services and perhaps even employees.

The organizations in question have yet to substantially change their approach to soliciting donations, however, a bill being proposed in Congress could allow patrons donating their cars to charitable organizations to declare tax deductions of $2500 or the car's appraised value – a significant jump over the current $500 (or auction price if the organization sells the car), but still a far cry from the $4500 many are receiving on trade-in under the Cash for Clunkers program.

[Source: Reuters]


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  • 26 Comments
      • 5 Years Ago
      Just read a story today that DEALERS are jumping out of this C4C scam FAST. They are not being paid by the Govt.

      Also, the NHTSA is rejecting 25% of the applications.

      Add to that the mismanagement by the Govt, the fact that C4C costs 10X MORE than the going market rate to reduce greenhouse gasses, the disgusting fact that these WORKING automobiles are being senselessly destroyed, the fact that IMPORT brands have benefited the most...and it is clear that this scam should have never seen the light of day.

      This has been a disaster that is hurting the citizens, dealers, and the country in general.
        • 5 Years Ago
        Yeah...............................................................

        I didn't get the story from Fox. I am quoting NADA spokesman Chuck Cyrill.

        How would you like your FAIL served? Grilled? Deep fried? Frozen?

        http://www.thetruthaboutcars.com/nhtsa-rejects-more-than-25-of-cash-for-clunkers-submissions/
        • 5 Years Ago
        From your article:

        "The number represents safeguards against fraud"

        Who knew? The ones doing the SCAM (or at least attempting to do so) are the car salesmen, not the govt....

        You can have your FAIL and eat it too...
        • 5 Years Ago
        "Shocking. Especially coming from Fox."

        Yes. Why haven't the other networks reported this? Are they lax or are they downplaying certain news stories?
        • 5 Years Ago
        Matt, You are absolutely right--bad program - what a waste to destroy a workable car and then to benefit foreign car makers. Should have been used if buying a totally American car and then somehow using the old one somewhere! Think of the energy is take to replace that car?
      • 5 Years Ago
      duh
      • 5 Years Ago
      Oh Dry it up! I love these behind the desk logistics that everyone spouts! CARS is a limited time deal and if you think for one moment that in the present economy people are still "charitable" then you are grossly mistaken. Point is, for the short time it was here CARS worked and did what it was supposed to do!
        • 5 Years Ago
        "Point is, for the short time it was here CARS worked and did what it was supposed to do!"

        And what was that?

        -Stimulate Japanese and Korean companies?
        -Screw dealers out of hundreds of thousands of dollars?
        -Push us further into debt?
        -Create more pollution (making new cars create far more than keeping the old ones running)
        -Make people spend money they don't have?
        -Create a artificial bubble that will pop leaving the automakers with a HUGE glut if inventory?

        If that was what this terrible and poorly executed scam was supposed to do, then yes...it has met it's objectives.
        • 5 Years Ago
        @matt. Lol. Ignorance must be bliss!
      • 5 Years Ago
      Funny, you assert as fact that which the report evidently did not substantiate, or at least was not cited by your post (which in my opinion would be an even more egregious error than the sensationalistic headline). The report said "could" and offered no evidence of "has".

      Your job is to verify that information, rather than exaggerate it. Your behavior is reprehensible in this regard.

      When this matter came to the Senate floor during the debate to extend the bill, exactly the opposite was stated, admittedly as anecdotal evidence by a Senator on the floor arguing against the amendment which would turn the so-called clunkers over to charities. I cannot remember the Senator who declared this, but I believe the amendment was offered by Tom Coburn. So yes, I'm citing hearsay of anecdotal evidence, which you in turn get second hand, but I'm open about it.

      You really need to learn how to do your job.
      • 5 Years Ago
      Obama wants you to be dependent on the government, not charities. It doesn't surprise me that the C4C program harms charities. The President wants to cut the tax deduction for charitable contributions too.
      • 5 Years Ago
      C4C applies to relatively few vehicles -- those with 18 mpg or less that are worth under $4,500. There are still plenty of donatable older cars running around.
        • 5 Years Ago
        What the charities also conveniently ignore is the fact that less new cars have been bought in the last two years. People donate old cars, typically, when they buy new ones. That is also drying up the pool of donated cars, too.
        Keith Griffin
        http://usedcars.about.com
        • 5 Years Ago
        exactly, and IIRC if was charity organizations that asked the Congress to limit the milleage requirement at or below 18mpg so that they still have some donations. But people just arent donating much in this bad economy when they don't have jobs etc...
      • 5 Years Ago
      I wonder how deep the pool of cash and qualified credit buyers is to maintain this program. Even if the least expensive car is bout, there's still a loan balance over seven large with taxes, a high hurdle for many these days.
      • 5 Years Ago
      While cash for clunkers may have given the auto industry a temporary boost, I cant agree more that this has hurt the sector of economy that deals with charitable car giving in addition to the actual charities. Speaking as a service that helps turn the donated cars into cash ( http://www.cardonationservices.com ) we too have seen the negative effects this program has produced. It was a temporary stimulus fix that came at the expense of a LOT more than the program appeared to cost.
      • 5 Years Ago
      This is non-news, and a made-up lobbyist 'factoid'. It has a great ring of truthiness to it; and very little reality.

      The assumption has been made by this organization that EVERY C4C trade-in is equal to a lost donation to them. Highly doubtful. It will impact donation rates, but it's misguided to state that every person trading in under C4C would otherwise have given the car to charity.

      Yes there's an impact to Charities, but until they actually report a decline in donations...a measured month over month decline that takes into account variation from last year...then they have nothing but speculation to stand on.

      • 5 Years Ago
      The donated used cars started to dry up when the IRS made it so you could only deduct the actual auction value of the donated car, not its book value. It may have been 'fair' to the IRS but it certainly hurt the charities. Compared to that, cash for clunkers is just a bump in the road.
      • 5 Years Ago
      "One veteran's aid organization, the Military Order of the Purple Heart, estimates that the $3 billion allocated overall by the federal government towards the C4C program – known officials as the Car Allowance Rebate System (CARS) – amounts to some 700,000 vehicles, which could cost charities like theirs some $105 million in donated vehicles. The lost income will mean that charities will have to cut services and perhaps even employees."

      People aren't giving, period. It's not CARS, it's the recession! Idiots.

      As for 700,000 vehicles? More than 95% would have been sold on or scrapped, not donated. $250 in your hand now is better than waiting for the tax break 9 months from now. This is like the RIAA claiming that every copied mp3 is a lose sale.

      Whiners. They should be ashamed of themselves using the "Purple Heart" name to prop up their shoddy argument.
      • 5 Years Ago
      Let it be stated that in my version of Cash for Clunkers that I posted here a week or so ago I'd have accounted for this scenario and would have authorized dealers to inspect vehicles for safety and durability issues and to certify the vehicle to be dispensed with through charities; of course vehicles that the dealer wouldn't stand behind would be dispensed with through destruction; but there are vehicles being traded in whose only crime is fuel economy issues which are perfectly safe and drivable and would have made charities some money anyway. Dealer would have been allowed to be reimbursed from CARS the cost of any repairs or inspections not to exceed $250 for parts and labor.

      I know this bill was really meant by Congress and the Messiah as SUV and Truck genocide legislation, but even their head up their keister tunnel vision should have foreseen the consequences of their transportation bigotry on other avenues of the economy. Wait.... I think I just gave this Congress and President too much credit for being able to think.....
        • 5 Years Ago
        What you suggest is in direct conflict with one of the key intents of the program, to get older, polluting "gas guzzlers" off the road. Just sayin'.
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