Friday, August 21, 2009 Update: Informed sources are projecting that the total $3 billion directed to Cash for Clunkers will be fully expended by Monday and the program will be winding down at that point. Some projections indicate that 700,000 new car sales, including a Cash for Clunkers component, are on the books or will be by Monday. There’s some talk of more funding for Cash for Clunkers, but with congress out of session until after labor day, that can not be immediate. Naturally, it will be some months before the car dealers themselves are fully reimbursed for qualified Cash for Clunkers purchases through the program.

Proponents call it a win win for the environment and the economy and the charities we represent indicate that a slow down in car donation proceeds (if any) has not been as severe as some had initially projected. Volume of car donations for us has been flat and a modest 7.5% decline in gross resale prices of donated cars seems to be the average.

Cash for Clunkers (the Car Allowance Rebate System act, also known as CARS), was recently passed by congress and signed by President Obama. It is an innovative new program designed to get gas-guzzling cars off the roads and motivate people to drive more fuel efficient cars. It is intended to replace older vehicles with new ones that are safer and pollute less. Supporters claim it will help jump-start auto sales and the U.S. economy, while also providing environmental benefits and increasing energy security.

How it works: to be eligible for $3,500 or $4,500 worth of federal money (some terms vary for trucks).

* Your vehicle must be less than 25 years old on the trade-in date
* Only the purchase or lease of new vehicles will qualify you for the federal funding
* Trade-in vehicles must get 18 miles or less per gallon
* Vehicles must be in driving condition, plus registered and insured for the full year prior to the trade-in
* The bill is intended to be a boost to struggling car dealers and anybody who wants a new compact or hybrid, and to help the environment, and who wouldn’t support that? Unfortunately, this legislation won’t help everyone. Here are some reasons that will prevent many people from taking advantage of the Cash for Clunkers program:

The gas mileage rates are so low that only very poor mileage cars like SUVs or trucks will qualify. Those who do qualify have to buy or lease a new car to get the money; just getting rid of an old junker gets you nothing with Cash for Clunkers. If the value of your trade in is more than $3,500 or $4,500 then you don’t get any additional money from the government.

The Cash for Clunkers legislation, as originally written, covered “approved” clunker vehicles for new car purchases from July 1st to November 1, 2009. For technical reasons re-determining what cars would qualify, the start date was subsequently delayed from July 1st to July 24th. Car dealers and legislators were all very surprised at the huge initial response such that by midnight, July 30th, the program was halted given the projection that the initial one billion dollars of funding had been all used up by vehicle purchases that are already in the system. The House of Representatives acted very quickly and the next day, July 31st (the last day of the congressional session prior to the August recess) passed a two billion dollar refunding of Cash for Clunkers. The Senate, with the same extraordinary speed, passed the same bill, Thursday, August 6th barely a couple hours before they also went on summer recess at midnight. Now, President Obama has signed it and the program can be restarted very soon. Stay tuned to this site for breaking news on this topic. Some proponents suggest that even with the additional two billion dollars in funding that the program will again run out of money long before November and that additional funding should be provided.

Fortunately, if you don’t meet all the criteria for getting the Cash for Clunkers payout, you still have other good options for getting rid of your old car. Vehicles that don’t qualify for Cash for Clunkers are still ideal car donations. When you donate cars, trucks, vans, RVs, boats or even real estate you get rid of your unwanted property, help a non-profit of your choice, and itemizing taxpayers get a write-off.

Hundreds of charities do invaluable work all across the country, and car donation funds are an important part of their revenue stream. Pete Palmer, co-founder of The Vehicle Donation Processing Center, Inc., states that his company “assists more than 400 charities who do great work and depend on car donation to pay for it. We handle it for them and in so doing we’ve put more than sixty million dollars in their hands — net-net, after all expenses were paid. Every penny of that sixty million dollars went to charities for their charitable missions.”

Now during tough economic times many people want to take advantage of every opportunity for a little extra income, however some Cash for Clunker qualifiers might find the extra dollars are outweighed by other benefits of donating a vehicle to a charitable organization via one of the reputable car donation organizations.

* You will feel good about helping a worthwhile cause
* Some car donation companies offer free vehicle pick-up
* Many will take any vehicle, running or not
* Plus the tax write-off for itemizing taxpayers.
* And to thank you for deciding to donate your car to charity, instead of participating in the Cash for Clunkers program — when you donate your car to one of our 400+ fine charities — just tell your operator you’d like the $300 Free Grocery or Gasoline Rebate when you make arrangements with us for the free car donation pick up.

A vehicle donation political coalition is reaching out to Congress to get a bill passed that makes car donation even more attractive. The passage of U.S. House of Representatives Resolution 571 will help the situation by reinstituting some of the tax benefits for vehicle donation to charities which were withdrawn by Congress in 2004. Accompanied by the economic downturn, those limitations have resulted in an average 52% reduction in vehicle donations according to industry sources. Currently, taxpayers are only allowed to deduct the fair market value up to a maximum of $500 or what the charity sells the car for, whichever is greater. Under HR 571 taxpayers would be allowed to ascertain and deduct the Fair Market Value up to $2500 for their car donation, and the appraised value over $2500. As of the end of June this bill is showing promise and has been co-sponsored by twenty Representatives from both sides of the aisle and every region of the country.

It’s important for the public to realize that Cash for Clunkers is not the best answer for everyone. Learn more about Car Donation and charities it supports.

“this cash for clunkers thing seems like a nice litmus test for rational thinking. it’s a real stretch to say that because an attempted stimulus program was wildly popular and more so than originally planned for makes it a failure somehow.”

Rational thinking? The speil on this program was that these trades would have an effect on environmental grounds and boost the failing US car manufactuers. The truth is that the trade-ins will have a minimal effect on environmental issues and most of the trade-ins were made for “foreign vehicles.” Yes, many of the foreign manufacturers employ US workers, but Toyoto, Honda and Nissan are “not” American companies. And you know what? Lower income people would love to be driving those rejects until they can afford something better [and greener].

Hello? Not a rational approach from my part of the woods.

Plus, “wildly popular?” When have you ever seen a handout, a government freebie that is “not” popular? Hurrah! We get something for nothing Who could complain? Maybe when you realize you’ll pay taxes on that handout. And if you live in a state with income tax, you’ll probably be double-dipped.

There’s no such thing as a “free-lunch.” Not even in Obamaland.

Of course, if you buy into the idea that we destroy what still works in this country, level it all and replace it with “green clones,” regardless of the price or the waste then I guess this all makes perfect sense.

Rational? Why not try retrofitting the dastardly gas guzzlers. Why not working with what we have and making it better, transitioning into what we want?

Oh no! That would make too much sense. That would crimp your definition of “rational,” which really means: hang onto your seats as we destroy what we have and freefall into a murky [and from where I sit, a very grim] future.

Take pm’s advice: stick a ratty sock in it. Some of us are actually paying attention.

From what I could tell you need a car already in good or excellent condition and X number of years old. So the older less fuel efficient vehicles wouldn’t be eligible unless the vehicle was in near perfect condition. How does this help real “clunkers”, ie. old maybe not in so good shape, get off of the road?

It doesn’t.

BTW We The People are the government. Not the folks in Congress or the President. That means We paid for this program.

- charities are reporting huge declines in the number of auto donations. These donations fund good causes and provide low cost transportation for some of the working poor.

- Thousands upon thousands of perfectly good vehicles are being destroyed, increasing the cost of used cars and reducing the availability of salvage parts. Again, this impacts those who can’t afford to take advantage of CFC.

- How much will CFC truly stimulate auto sales in the long run, and how much is simply due to delaying some sales and accelerating others? I would expect that Sept and later sales will be lower than otherwise because many people were going to make these purchases anyway and either held off waiting for CFC, or would have done so anyway in the next few months. And for those sales, how much impact did it really have on the selected vehicle?

I drive a 2002 Honda Odyssey. At about 80K miles, it is just getting broken in. The 2001 Odyssey is an approved ‘clunker’. I can imagine there are plenty of people who would love to have one, but it would be destroyed instead.

The unintended consequenses of legislation in many cases bother me way more than the stated provisions. For another good example, google ‘Consumer product safety improvement act unintended consequenses’. This is a well-intentioned piece of legislation that passed with a huge bipartisan majority – but is a mess in many ways…

If people knew that their $12.99/lb steaks were being subsidized to the extent they are, people would be upset. Back in the late ’90s it was about $2.50/head/year to “ranch” on government, aka OUR, land. That’s right, less than a Starbucks coffee. With no sense of responsibility for the riparian areas the relatively dumb beasts rip to shreds. (I eat some beef, too, btw.) Ranching is a smart business choice, but it’s a lot different than planting crops.

The farming I was referring to was the stereotypical midwest type. The idyllic farm of wheat, corn, soybeans, and other commodity staples. You can’t plant corn and wheat in the same field year after year and expect the yield to maintain a decent level. The fields need a (paid) vacation, if you will.

(OT: I don’t like the mega-ag corps selling products that don’t provide viable seeds so farmers in Africa or Indiana can’t use them.)

And yes, the farm lobby (aka family farmers) used to be heavily Democrat and were very much for government involvement because some national entity was the only thing keeping food on their own tables in dry or wet years. Now, most farming isn’t done by individual families, but corporations. Hence, a new type of lobby against government “interference.” And thusly, the reduced subsidy for milk. Gallon prices jumped enormously a few years back–because the subsidy was either eliminated or severely reduced.

I wouldn’t call the people I know in the MidWest Queens, at all. It is a very difficult and risky “life style” that not only is rewarding at many levels, but puts domestic food on all of our tables.

And lastly, I’d much rather subsidize a farming community than the mega-ag/auto/energy/oil industries.

I guess GM’s new motto will be ” close enough for government work”

WOMEN WITH INTELLIGENCE AND EXPERINCE,MEN WHO SUPPORT THEM AND COUNTRY BEFORE PARTY ALWAYS

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