From Miami Herald Staff and Wire Reports
For each car turned in to the federal government's popular "cash for clunkers" program, dealers see a boost in sales and consumers can get up to $4,500 toward a new, more fuel-efficient car.
Charities that accept cars as donations, however, might lose out.
In the meantime, the Senate on Thursday was set to approve an additional $2 billion to keep the clunkers program running after nearly depleting its initial $1 billion. Officials said the additional money would help consumers purchase 500,000 more new-model cars.
U.S. Rep. Betty Sutton, D-Ohio, has said that part of the reason qualified cars were limited to 18 or fewer miles per gallon was to protect charities from losing out on decent cars.
But some nonprofits report they are losing out anyway as potential donors choose the generous Cash for Clunkers trade-in allowance over the smaller tax deductions they would receive for donating their old cars.
Car donations to the Salvation Army Adult Rehabilitation Center in Miami were off sharply in July, according to Lt. Jay Ward, the administrator of the center, which funds drug and alcohol treatment centers for 108 patients.
"If the Cash for Clunkers program continued and our car donations stayed down, and if we could not find a way to restore income, we'd have to cut beds," Ward told The Miami Herald.
On Thursday, Salvation Army workers were preparing for Saturday's auction with an inventory of 13 cars, mostly compact vehicles that most likely would not have qualified as low-gas-mileage clunkers under the federal program.
I'm used to having 20 or 30 cars on the lot," said Felix Vasquez, the Salvation Army's auto donations manager.We can't make money if we don't have the vehicles."
Ward said donations frequently hit a low point in late summer and he was unprepared to blame the entire car shortage on Cash for Clunkers.
"Donations in August have already picked up some so maybe the initial wave is over, the rush for Cash for Clunkers is over."
As of Tuesday, more than 157,000 autos had been turned in. To qualify, they must be less than 25 years old, get less than 18 miles per gallon and still be drivable. Although some parts can be sold, by law, the cars must be crushed or shredded.
So far, auto-donation charities report differing effects from "cash for clunkers":
Charity Cars, Longwood, Fla. President Brian Menzies said he's frustrated that the program sends usable cars to the scrap heap. "They could have accomplished this task and also helped the poor as well by mandating that those vehicles that were in good enough shape be donated to poor people," said Menzies, whose group gives people cars to help them turn their lives around.
He has seen a brief spike in donations, which could have come from people frustrated by the clunkers program's strict requirements. He points out that, in the end, if the program helps the auto industry, it could help his cause.
"Our program is directly tied to the health of the automobile industry," he said.
Vehicle Donation Processing Center, Monrovia, Calif. Pete Palmer, vice president and co-founder of the center, which helps about 400 charities raise money, expects to lose out on some donations, but he doesn't expect it to be significant. His group began offering $300 toward groceries or gas to callers who decided to donate.
Forest Lake Academy Vehicle Donation Program, Apopka, Fla. Director John Shadwick said that most people who donate cars do so for the tax write-off, so he doesn't expect cash for clunkers, which requires people to buy new cars, to have a significant effect.