REPORT: Cash for Clunkers is costing charitable organizations donations
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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Reader Comments (Page 1 of 2)
Willie 5:47PM (8/17/2009)
I had a feeling this was going to happen after CARS began. But the good news for the charities is that CARS is a temporary thing that is only going to last a month or two more. The Bill in Congress seems more promising for all charities.
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Big Mola 6:22PM (8/17/2009)
That's a good point. And another thing: People have free will--They can choose to participate in C4C, or not. (Naturally, altruism does not come easily.)
Nozferat 6:44PM (8/17/2009)
Somehow I think many people WHO DO NOT qualify for C4C because they were driving around in much more socially responsible vehicles would be far more altruistic to begin with.....
So this deal is screwing those people 2 fold....
The Hit 7:34PM (8/17/2009)
Wait, if the people who do qualify for C4C WEREN'T charitable as you suggest, then charities weren't gonna get these cars anyways...
Bob-omb 10:26PM (8/17/2009)
Yeah, Nozferat, you may want to check your logic there. Anyway, the top 10 cars traded in are mostly pickups and truck-based SUVs. Are these really the types of cars that get donated to things like Meals on Wheels? The vast majority of charities want small cars. Which is why I was all too happy to give my ancient Cavalier to charity, and why they wanted nothing to do with my old Tacoma.
christopher.juliano 8:20AM (8/18/2009)
There are something like 280 million registered vehicles in the US, taking even a million clunkers out of circulation is not likely to impact charities. The people who are turning in all these 1990's SUV's have been driving them for years and had plenty of time to give them away, they could have done it already. This is just another example of parroting ideas floated out to make everything the govt. does seem negative.
Nozferat 6:53PM (8/18/2009)
My logic is clear....READ WHAT I WROTE...I said the socially responsible people are are getting screwed over even more.
laser 5:53PM (8/17/2009)
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.....
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John P. 5:56PM (8/17/2009)
Your idea actually sounds really good. That would have worked out well for everyone.
As far as C4C and donations, it doesn't surprise me. With the current prez proposing to phase out tax deductions for charity donations, soon all our charitable giving will be deducted from our paycheck in the form of taxes.
Gov. is much wiser about who gets our money anyway right?
daleam 6:32PM (8/17/2009)
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'.
Fir3hawk 5:55PM (8/17/2009)
duh
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fizzandpop 6:01PM (8/17/2009)
Wait, the gubmint passed a bill that doesn't help 100% of everybody everywhere? Storm the Whitehouse!
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Farris 6:01PM (8/17/2009)
I seem to remember basically EVERY commenter pointing this out when C4C was announced.
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Matt 6:01PM (8/17/2009)
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.
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The Hit 7:38PM (8/17/2009)
BREAKING NEWS: FOX NEWS SAYS DEALERS ARE NOT BEING PAID.
Shocking. Especially coming from Fox.
Matt 8:46PM (8/17/2009)
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/
Frank 10:32PM (8/17/2009)
"Shocking. Especially coming from Fox."
Yes. Why haven't the other networks reported this? Are they lax or are they downplaying certain news stories?
The Hit 1:48AM (8/18/2009)
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...
Susan 8:25AM (8/18/2009)
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?
jaydubz 6:13PM (8/17/2009)
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!
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