Cash For Clunkers: Are charities responsible for the 18 mpg cutoff?

Scott Benjamin

Is the Cash for Clunkers program making it more difficult to find a good used car? (AP Photo/Charlie Riedel)

If you've read my past few posts about the Car Allowance Rebate System (CARS), also called the Cash for Clunkers program, then I'm guessing that by now that you've also gone to the National Highway Traffic Safety Administration (NHTSA) official CARS Web site, www.cars.gov, to take a look the program rules. And after you examined those rules, I'm wondering if you had the same question I had...

Why would the U.S. government set 18 miles per gallon as the upper limit on your potential clunker trade-in? That seems a little low, doesn't it? Well, I think I know why. And would you believe that charitable donation organizations have something to do with it? And even with the charities best interests in mind, they're still feeling the unintentional side-effects of the Cash for Clunkers program.

So, here's what's happening: Rather than donating those old cars, which are then repaired and passed along to low-income individuals and families, people are taking their "clunker" cars to the dealership so that they can be traded-in for a factory-fresh new car and to take advantage of the $3,500 or $4,500 rebate under the CARS program. As a result, the quantity and quality of the cars that end up in the charity lots will suffer. It's not hard to see that if the limit had been set just a little higher, say 20 miles per gallon, a lot more people would have been able to take advantage of the program -- but then the charities would have been hit even harder. See the dilemma?

But, did the U.S. government take this charitable donations-angle into account when they were outlining the cash for clunkers program? Apparently so, and that's how they arrived at the seemingly random 18 miles per gallon cutoff.

In an interview within an article by NPR's Elizabeth Shogren, U.S. Representative Betty Sutton (D-OH), a primary sponsor of the CARS Act, stated that the charities' concerns happened to be one of the reasons that Congress limited the program to cars that get 18 miles per gallon or less. Sutton also said that if the fuel economy maximum is harming the charities it's not deliberate, and when asked about the somewhat low upper limit, she said "it severely cut down the number of cars that might be traded in under the cash for clunkers program, thereby making all of those cars available for charitable donations."

To be fair, the Cash for Clunkers program isn't the only thing hurting the charities right now. The article also points out that due to the current state of the economy, donations have dropped. I guess people are simply holding onto their used cars a little longer than they did in the past.

Hmmm...so it seems that we can include charities on the list of groups that oppose the Cash for Clunkers program. I wonder if I can find any more to add to that list for tomorrow's post?

More related stuff:

HowStuffWorks - Charity & Goodwill

How Cars Work

How the 2008 EPA Fuel Economy Ratings Work