In a time when donations are already down significantly and many charities are struggling financially, the newly passed “Cash for Clunkers” program may decrease the number of automobile donations given to charities. In an effort to stimulate the sale of automobiles and encourage people to trade in their less fuel efficient vehicles, the government will give people a cash incentive for trading in their cars in favor of more efficient vehicles.
When faced with a choice between up to $4,500 towards a new car and the tax benefit of donating your car to charity, charities are concerned that consumers are more likely to choose the cash, further hurting charities that rely on automobile donations to stay afloat. While the program has been restricted to only the most inefficient vehicles, specifically with the impact on charities in mind, it may be too much in this time of economic difficulty.
If you are considering donating your car to charity, we suggest you read Charity Navigator’s Guide To Donating Your Car for tips on this subject.