Cash for Clunkers Cause Car Donations to Crash

Charity sees huge drop in donations and sales as people trade in vehicles instead

By KEVIN COKELY

Updated 8:45 PM CDT, Mon, Aug 3, 2009

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Used cars are seen in a dumpster to draw attention to the "Cash for Clunkers" program at Performance Chevrolet in Sacramento, Calif., Saturday, Aug. 1, 2009. On Friday Congress approved an additional $2 billion for the program that provides $3,500 or $4

The "Cash for Clunkers" program is turning out to be a huge boost for carmakers, but their gain is coming at the expense of charities that depend on donations of old cars.

The Big Three automakers saw their best sales in a year in July. But at the same time, fewer donated cars are rolling onto the "Texas Can!" auction lot in Arlington.

Donations to Cars for Kids have been off by nearly a third since Cash for Clunkers was announced, as more North Texans trade in their used cars for new vehicles.

Some car owners have even canceled their donations to trade in the vehicle instead.

"We have auctions every Saturday," said Cheryl Rios, of Cars for Kids. "And in the past few auctions, we have noticed about a $60,000 drop in sales. And in donations, we're down about 25 to 30 percent."

The nonprofit organization runs 11 Texas Can! Academy campuses across the state, serving 5,000 at risk students, more than half of whom are in North Texas.

The group is now looking for ways to make up its budget shortfall, taking miscellaneous donations including computers and office supplies.

"We're trying to think out of the box -- cash donations to try to make up this shortfall in our budget, which is going to be pretty significant if it continues to go on the way it has," Rios said. "These kids have nowhere else to go if we're not here."

Used-car dealers are also suffering, with some reporting sales down by nearly 30 percent.

The Cash for Clunkers program is only valid toward the purchase of a new vehicle.

"I see probably on average, about three to five trades every day," said Sam Mahrouq, who owns Automax in Arlington. "Now we haven't seen any trades at all."

The Arlington-based National Independent Automobile Dealers Association on Monday sent an e-mail to members urging them to contact their U.S. senators' offices to "register their feelings about the Cash for Clunkers program."

The organization said it has not supported the federal program "because of its impact on independent dealers."