New Cash for Clunkers legislation offers not only an opportunity to purchase a new vehicle, but also the opportunity to donate one.
The program, which kicked off July 24, makes consumers eligible for $3,500 or $4,500 worth of federal money if their vehicle meets the following standards:
-Must be less than 25 years old on the trade-in date
-Only the purchase or lease of new
vehicles will qualify you for the federal funding
-Trade-in vehicles must be in driving condition, plus registered and insured for the full year prior to the trade-in
The bill is intended to be a boost to struggling car dealers and anybody who wants a new compact or hybrid, and to help the environment. Unfortunately, this legislation won't help everyone.
The gas mileage rates are so low that only very poor mileage cars like SUVs or trucks will qualify. Those who do qualify have to buy or lease a new car to get the money; just getting rid of an old junker geets you nothing with Cash for Clunkers. If the value of your trade in is more than $3,500 or $4,500, then you don't get any additional money from the government.
If you don't meet all the criteria for getting the Cash for Clunkers payout, you still have other good options for getting rid of your old car. Vehicles that don't qualify for Cash for Clunkers are still ideal car donations. When you donate cars trucks, vans RVs, boats or even real estate, you get rid of unwanted property, help a non-profit of your choice, and can get a tax write-off through itemization.
Hundreds of charities do invaluable work all across the country, and car donation funds are an important part of their revenue stream. Pete Palmer, co-founder of The Vehicle Donation Processing Center, Inc., says his company "assists more than 400 charities who do great work and depend on car donation to pay for it. We handle it for them and in so doing we've put more than $60 million in their hands — net-net after all expenses were paid. Every penny of that $60 million went to charities for their charitable missions."
Now, during tough economic times, many people want to take advantage of every oppportunity for a little extra income, however, some Cash for Clunkers qualifiers might find the extra dollars are outweighed by other benefits of donating a vehicle to a charitable organization via one of the reputable car donation organizations.
For example, you will feel good about helping a worthwhile cause; some car donation companies offer free vehicle pick-up; many will take any vehicle, running or not; plus, there is a write-off for itemizing taxpayers.
A vehicle donation political coalition is reaching out to Congress to get a bill passed that makes car donation even more attractive. The passage of U.S. House of Representatives Resolution 571 will help the situation by reinstituting some of the tax benefits for vehicle donation to charities which were withdrawn by Congress in 2004. Accompanied by the economic downturn, those limitations have resulted in an average 52 percent reduction in vehicle donations according to industry sources. Currently, taxpayers are only allowed to deduct the fair market value up to a maximum of $500 or what the charity sells the car for, whichever is greater. Under HR 571 taxpayers would be allowed to ascertain and deduct the Fair Market Value up to $2,500 for their car donation, and the appraised value over $2,500. So far, this bill is showing promise and has been co-sponsored by 20 Representatives from both sides of the aisle and every region of the country.
Click here for a list of charities accepting car donations.
