These days I can hardly tune in to radio station for an hour without hearing those annoying "Donate your car today" jingles. Anybody knows what those charities do with the donated cars? Do they turn them over to some used car dealers for resale and then they get maybe a dime on a dollar of the sale price? Better than nothing, I guess, but it still would smell like a scam to me.
what could possibly be a scam about getting given a car for free, getting paid $1000 by dmv to take it off the road, then getting $500 or more for it from a junkyard?
Is that really what's going on?
well, the cars are collected by a "processor" that handles donations, then hands a percentage the cash to whoever the worthy cause is. the same processor can act for multiple recipient organizations.
other than that, dmv does indeed pay to take old cars off the road, or they do here in kalifornistan to the tune of $1000. and junkyards do indeed get paid to "recycle" what dmv takes in, apparently $500 or more depending on vehicle. then, if the junkyard re-sells the car, they can get anywhere from $1500 on up. my local had a crash-damaged late model civic for sale last weekend for $2500!!! i've seen other high-end vehicles handed in as i entered the junkyard, only to see it being loaded onto a private flatbed as i leave again. clearly there's a market for vehicles where one party wants to junk them, and another wants to buy them.
as for the processor, one of the outfits local to me is having a promotion where they're giving away a 64.5 mustang. i'll bet they didn't pay a dime for it and the prize value is estimated at >$10k. now that's good business if you can get it. for all the rest of the crap that has no resale value, they go for parts and scrap metal. scrap steel's worth decent money to smelters - much cheaper easier than refining from ore.
If the car is worth $1,000, you give it to them, write off $1,000 saving maybe $300. They sell the car for $1,000, keep $800 as overhead, and give $200 to the charity.
Whereas if you sold the car to Fred for $1,000, you could give $1,000 to the charity, for the same writeoff for yourself.
Have a nice day, suckers.
J.
That's California for you, where money doesn't matter to Sacramento. I don't think many other states do it though.
Yes, but they also could have been turned over by insurance companies who totalled them, right?
Thanks for confirming my suspicion and as JRStern writes, there are better ways to help worthy charities.
well there has to be something in it - all there donation companies don't do all this stuff for free in your state i'm sure.
yup. i'm pretty sure kalifornistan is ass-deep in something there too because i recall reading something about insurers being "encouraged" to write off vehicles much more aggressively to help out the car sales lobby. and the steel recyclers, that just so happen to own the junkyards where they get sent, and who aren't exactly unfamiliar with the halls of sacramento given that they had to do a bunch of homework on "environmental impact" a while back.
the whole thing is just a huge giant scam. people would junk cars anyway, they don't need the taxpayer's involvement on any level. and insurers should keep their sticky beaks out of it too.
indeed.
yeah, but a nice jingly tune about "cars for kids" or some blonde hottie wearing a sailor's cap are /so/ appealing!!!
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