Blog: Cash for Clunkers Treats Car Owners Badly

The Cash for Clunker bill winding its way through Congress, and expected to meet passage and the Presidenta s signature within a month or so is written, thus far, in a way that does more to boost sales than curb CO2 emissions.

[karenc]

This bill would put every charity car donation program in the nation out of business since the amount of the voucher would be much greater than the tax deduction. The solution is to simply allow the charity to issue the voucher in lieu of the tax deduction. The charity would then junk the car in accordance with the bill. This way, everyone wins, the car dealer, car maker, car buyer and the charity.

[Jim]

When the 4500 dollar vouchers start- I expect the price of the cars will jump to MSRP. Will all incentives in place now be removed? As long as the manufacturer is being subsidized, do they care if anything sells?

[WHO CARES ABOUT CHARITY]

I WILL NEVER GIVE AWAY MY CAR

[Bernardo]

Cash for Clunkers only applies to people buying new cars. How many of the charity donations are because someone went to a dealers a bought a new car? There are a lot of rules that will narrow this subset down even farther. For example the car has to get an EPA combined of less than 18mpg. A late 80's Celebrity for example gets 20mpg and therefore isn't eligible. The clunker has to have been owned and insured for the last year. I'd bet a lot of the charity donations are cars that have been sitting uninsured. For the most part the Clunkers are going to be vehicles that charities wouldn't want anyway.