‘Cash for clunkers’ slows car donations to charities

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

= You used to hear it all the time. Whenever someone raised the question of what to do with a near-worthless rust bucket, the answer almost always came back the same -- donate it to charity.

Since the arrival of ‘cash for clunkers,’ however, donations have dropped off. It’s not hard to imagine why -- a $3,500 or $4,500 voucher is certainly more appetizing to the cash-strapped recession-era new car shopper than a tax writeoff come year’s end.

The damage has not been insignificant. According to the Associated Press, a Texas-based charity estimates that the cash for clunkers program has already cost it $75,000 in missed vehicle donations. Unfortunately, instead of being sold for charity funds or turned over to needy families, formerly donation-worthy cars will be sent to the crusher with seized engines, per the program’s stringent guidelines.

Despite a slowdown since its inception, the federal program has succeeded in sending consumers to dealerships. According to a survey of 517 in-market shoppers by Kelley Blue Book (KBB), the cash for clunkers program has persuaded 1 in 10 shoppers to purchase a new vehicle sooner. Taking into account that many trade-ins don’t qualify for the cash for clunkers voucher, charities may see some relief yet. But when you consider that owners of particularly rundown vehicles will be looking at either a low-value tax writeoff or a $4,500 discount on a new car, the decision-making process becomes pretty clear.

Thinking of donating a clunker of your own? Check out this firsthand experience of a Land Rover-to-Nissan Cube swap and get an idea of what you’ll be dealing with.

-- Brian Alexander

Brian Alexander is a staff writer at DriverSide.com