After only 4 days*, President Obama’s team has suspended the CARS program (also known as “Cash for Clunkers“). It appears that the response has been overwhelming and the money has simply run out.
It’s possible they could re-open the program if they found that some of the claims were invalid and they still have money left. However, if you were planning to cash in on the program, you should probably make other plans.
Was it a success? I don’t know, we’ll have to see how the story unfolds. It’s possible that it was as much of a success as it could be. On the other hand, there are also scams and stories of dealers raising prices, so who knows.
So, what do you do if you still want to get rid of your older car?
You can donate it to charity!
There are a lot of charities that take car donations and they do many different things with them. Some resell them, some sell them to scrappers, some give them away. By donating, you should be able to claim a tax deduction.
Make sure the organization is a 501(c)(3) organization itself, so you can claim the deduction. Research any claims from second-parties who say they’ll donate your car’s sale profits to a charity. Some can give you the deduction and some can’t. And get a receipt.
To learn more about car donation, you can check out the IRS’s car donation guide.
Some ideas for where to donate:
- Fiscal Geek donated a car to World Vision, which is based near him but may accept donations from other regions of the country. World Vision is a great organization which equips people with the tools to escape poverty.
- The popular NPR show Car Talk accepts cars as a way to fund the station.
- Charity Motors is a 501(c)(3) organization which donates proceeds from your sale to other 501(c)(3) you designate. They have suggestions on your site but accept any 501(c)(3) organization.
When preparing to donate a car, it’s important to do your research and perhaps even contact a tax professional about just what you can deduct, how to make the deduction, and how it’ll affect your taxes. Otherwise you may find yourself having done a good thing (which is still good) but unable to use it for your financial benefit too.
*Edited to add: Of course, the program has been open since Jul 1, so many dealers had already been collecting eligible applications from the 1st.
After the restart, Cash for Clunkers is over probably for the last time. Information on whether Cash for Clunkers affects your taxes.
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A few years ago a friend of mine wanted to donate a car that was in perfect running condition and good physical condition. However, he had a problem finding a charity that would accept it as a donation. Most of the charities have limits on how old the car donated can be, and his car was “too old” to be donated. If I remember correctly his car was 10 years old, perhaps slightly less than that. He tried NPR and a number of other organizations before discovering one that accepted his car and even picked it up at his home, the Salvation Army.
Four days…isn’t that amazing? And it drained a billion dollars from the Treasury! It boggles the mind.
So, if everyone in the country who’s driving a piece of junk and was willing to go into hock to buy a new car ($4,500 is a drop in the bucket compared to the cost of a new vehicle) actually bit on this offer, would the federal government go broke? Tells you something about the pent-up demand for cars, doesn’t it…especially considering that the trade-in car had to be a real, certifiable piece of junk. My son’s car, which is so old it barely runs, wasn’t eligible. Not that he could have afforded a $15,000 loan to buy a new Toyota, anyway.
.-= Funny about Money´s last blog ..Best of July 2009 =-.
Read this article: The Real Reason for the “Cash for Clunkers” Suspension. The ex car salesman blog shares exactly why they stopped the program. Even reports that some sales managers are calling asking for the money back because they were denied the rebate when the final paperwork was submitted but their car was already ruined by dumping a solution in the engine. They now have no car. Scary. See: http://tinyurl.com/ml9sdo
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