Cash for Clunkers Clobbering Charities

I think we all saw this coming:

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.

Back in 2003 I got a company car. Before that I had been driving my own 1991 Chrysler 5th Avenue that by that time had 174,000 miles on it, a cracked windshield (that happened a few days before I got the new car), and an air-conditioner that barely worked. It was falling apart.

I knew I could never sell the car in that condition, and I didn't want to spend the money to fix it up. I called a charity I was familiar with and they were glad to come get it. In fact, the tow driver was surprised when I told him it was driveable. I guess they pick up a lot of real wrecks.

I deducted the contribution and everybody was happy.

The long-term effect of Cars for Clunkers will be interesting to watch. Prices of used cars are already on the rise, and prices of parts will likely go the same direction. Who knows how long until charities start to recover.