'Clunkers' Program Costing Wounded Vets, Other Needy People Millions in Aid

The popular cash-for-clunkers program is slashing donations to charities that rely on gifts of cars to fund social programs, Reuters reported today, citing charity officials.

Volunteers of America and other aid organizations that receive tens of thousands of cars each year said such donations have quickly fallen up to 12 percent - and fear a 25 percent drop eventually, or more than $100 million - as owners rush to trade gas guzzlers for new fuel-efficient models while federal rebates last.

"We started seeing it right away in July" when the program began, said Jim Hartman, vice president of vehicle donations at Volunteers of America. "It varies by market, but there's been an 11 to 12 percent drop compared with last year."

"The cars I'm seeing cashed in as clunkers, like older SUVs, are absolutely the typical donation to us," he said.

The clunkers incentive gives consumers a U.S. government rebate of up to $4,500 for trading in some gas-guzzling vehicles for new ones with better fuel economy. Congress scrambled early this month to add $2 billion in funding when the program's initial $1 billion allocation was quickly spent.

Rick Frazier, director of the car-donation program at The Military Order of the Purple Heart, which assists wounded U.S. veterans, estimates the $3 billion will result in 700,000 clunker trades.

Frazier said charities would normally receive 25 percent of those 700,000 cars and, at an average value of $600 each, they could be out $105 million over 24 months.

"That will be devastating," he said. "A lot of services will have to be cut."

Posted by

Scott Doggett August 17, 2009, 4:31 PM

Permalink

Categories:

Fuel Economy, Tax Incentives

Technorati Tags:

Car Allowance Rebate System, Cash for Clunkers, Clunkers, Fuel Economy, Fuel Efficient, Needy, Veterans, Volunteers of America