Cash for Clunkers Bill Concerns Car-Donation Groups

Car-donation groups are keeping a wary eye on the Cash for Clunkers bill, fearful that it will dry up a key supply of used cars. The bill is adding insult to injury for these groups, as it comes on top of a painfully bad economy that has already slowed donations.

"It's hard to say; I think [the bill] will have an impact," said Marty Schloss, cofounder of "I think it will hurt."

"Kars4Kids is certainly concerned that this legislation will impact our charitable work," Yehuda Meth, a spokesman for that charity, said in an email. "While the bill is purportedly to remove smog-producing cars from the road and benefit automakers, Kars4Kids is conscientiously doing our share by frequently taking cars with high emissions out of circulation."

Charity Development works with groups on car-donation programs, and spokesman Tim Finnigan said he sees trouble for groups who recirculate used cars.

"I think it's going to affect the ones that have retail programs or programs [where] they're trying to give back cars to individuals," he said.

Under the Cash for Clunkers bill, vehicles that get poor mileage can be traded in for a $3,500-$4,500 credit toward the purchase of a new vehicle with better gas mileage. Check out the details here. All the old vehicles traded in must be scrapped.

Individuals who donate their cars can claim a tax deduction for the sale price of the vehicle. While some new-car shoppers might be enticed by the Cash for Clunkers credit, Schloss isn't worried about continued donations from what he calls the altruistic types.

"That's not going to be affected at all," he said.  

However, Ed Kim, director of industry analysis at consulting firm AutoPacific, said that while he doesn't see the bill having a sizable impact on vehicle donations, he thinks something else may: "The economy would have a more significant impact on charitable donations of vehicles than Cash for Clunkers would," he said.

Finnigan said the economy is already playing a role in terms of donations, noting that business for him is off 15%-20% from previous years. With the Cash for Clunkers legislation, "if donations fall off to charities, it's just another kind of nail in the coffin for them," he said.

For those who do want to get rid of a car and help a charity, Schloss offers some advice to make the donation go further: "Sell your car yourself and give the money to charity."

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