Call it the law of unintended consequences, or something you could have seen coming from a mile away, but vehicle donations to charitable organizations have dropped markedly, and the blame is being laid at the feet of the Cash For Clunkers program. Unlike a lot of car guys, I’m a big proponent of the CARS program. Most of the cars being turned in aren’t all that rare or lust worthy (my main, and other gearhead’s concern) and it gets older, less efficient cars off the road. And another upside is that it pumps more money into places like Michigan, Ohio and Indiana.

A drop in vehicle donations has been mentioned by several U.S. charities. For example, Volunteers of America, rely on donated vehicles as a main portion of their funding stream. Vehicle donations have been sliding since the start of the Cash For Clunkers deal started.

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The Obama administration will tow the “cash for clunkers” program to the junkyard Monday, closing the book on the $3 billion program that convinced hundreds of thousands of anxious consumers to buy new cars.

The program is considered one of the most successful pieces of President Barack Obama’s economic stimulus plan, and traffic in dealer showrooms is likely to be heavy leading up to Monday’s deadline.

“One thing is certain — it motivated hundreds of thousands of consumers to buy new vehicles,” said Jack Nerad, executive editorial director at Kelley Blue Book, which tracks car sales. “Whether it boosts the overall economy for any length of time remains to be seen, but it does demonstrate that a direct stimulus to consumers can quickly generate substantial economic activity.”

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Transportation Secretary Ray LaHood, the nation’s top car salesman in recent weeks, has cited the Obama administration’s best-seller list of mostly smaller, fuel-saving cars like the Ford Focus to describe the success of the Cash for Clunkers rebate program.

But what LaHood and other administration officials usually don’t mention is that some trucks and sport-utility vehicles that get less than 20 miles per gallon, like the Ford F-150 truck and one version of the Cadillac SRX Crossover, also are being purchased with the new government subsidies. Both are bulky vehicles weighing more than 6,000 pounds when loaded that boast at least 248 horsepower.

Just how many consumers used the federal rebates to buy these larger, not-so-green vehicles is unclear. The Obama administration has declined so far to release detailed records of purchases under the program being compiled by the Transportation Department, listing every clunker deal requesting rebates. The Associated Press requested the data July 31.

People are flocking to dealerships to trade in their vehicles under the “Cash for Clunkers” program, but once the trade is made, dealers and salvage yards are required to remove the car from the road for good, but how?  First up, under the program, the dealer seizes up the engine with sodium silicate–a job usually handled by the dismantlers, but now the salvage yards are earning a lot less because the engine is now useless scrap metal.  Joe Pattison of Can-Am Auto Salvage in Ontario, CA says an engine, which can bring in between $250-$1500, is like “a pearl in an oyster.”

After disabling the engine the car is then towed to the salvage yard where it is evaluated for profit potential, and liquids like gasoline and anti-freeze are drained.  According to Pattison, a vehicle like an old, flawed work truck would be crushed sooner than a car with usable front end parts and transmission; a catalytic converter which could yield $100; good tires worth $100, and metal that could earn the yard up to $150.  Those parts are then cut out, as is the car’s computerized “brain”.

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On July 24, the EPA issued revised new combined MPG numbers for an unknown number of vehicles. As a result, some vehicles that had previously qualified for the Cash for Clunkers program will no longer qualify. If you’re not sure if your vehicle qualifies, you can confirm your car’s new combined MPG by visiting www.fueleconomy.com.

Nationwide, an estimated 250,000 people could get credits, helping to spur sales at a time when industry sales are down 35 percent.

Since trade-in value essentially represents the “wholesale” cost of a new car, you can generally do much better by selling some cars directly to a new owner, bypassing the middle man. The cars we’ve listed below represent those vehicles we feel are most likely to be available for less than $3,500, the minimum voucher value, and are therefore great matches for the CARS Program. If we think a particular car will sell for more than what you can get back on it through the program, it didn’t make our list.

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Chrysler Group LLC said Wednesday it is offering up to $4,500 in cash toward the purchase of a new vehicle as it seeks to match a government incentive for people to trade in their old gas guzzlers. The automaker said it will offer cash or zero percent financing for six years on most of its 2009 Chrysler, Dodge or Jeep models. The incentive begins Thursday and lasts through Aug. 31.

Chrysler said in a statement that buyers are eligible for the new incentive even if they are not trading in a vehicle under the government’s “cash for clunkers” legislation. Smart move. In this economy, people have been holding on to their vehicles, in many cases, praying they continue to run while foregoing maintenance to save money. Now, they can get a huge rebate toward a new car. It’s a brilliant marketing move and I expect other car makers to copy it soon.

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As the 4th of July car-buying weekend approaches, dealerships throughout the country are encouraged by a series of positive signs in the market. Consumers encouraged by promising economic signs headed back to dealer showrooms last month, but sales sputtered in late June as prospective buyers waited for the government to introduce its cash-for-clunkers incentives. Experts say that people are holding onto their old beaters in hopes of tapping into some of that “clunkers cash.”

June’s selling rate slipped below the pace in May and was down sharply from last year, but auto executives said earlier this week that the market had begun a gradual recovery, supported by strengthening consumer confidence.

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Get ready, clunker owners. If the Cash for Clunkers bill makes it through the Senate (which is no slam dunk) you may be able to trade in your bomber for incentives on a brand new car! Now that it’s in the final turn and making a stretch run, opposition to this bill will be heating up as well, because different segments of the automotive industry apparently think the law itself will be a clunker if and when it’s put into affect.

The auto industry and the nation’s lawmakers are pushing for quick Senate action on “cash for clunkers” legislation to boost auto sales, after the House overwhelmingly passed such a bill yesterday. But it remains unclear when Senate supporters may overcome the objections of Senate appropriators and a group of senators who say the House proposal doesn’t do enough to improve fuel efficiency on the nation’s highways.

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The British government says more than 35,000 new cars have been ordered through its new car scrappage program since it was launched a month ago. The government and car industry are sharing costs to offer discounts of 2,000 pounds ($3,225) to new car buyers who trade in a model more than 10 years old.

Prime Minister Gordon Brown said Friday the program helps consumers and protects jobs by stimulating demand for new cars. The auto industry in Britain is faltering and 11 successive months of declines in new car sales have led to production cut backs and layoffs.

This is not a novel idea, but the British have been more proactive in doing it. Our “Cash for Clunkers” program here in the U.S. is a similar concept, but we’ve been much slower in implementing ours. It’s a great way to get gas guzzling, polluting old vehicles off the road, and provides real incentives for both drivers and car dealers alike. Let’s get on the ball, Obama and Friends. If the Brits took to this program so positively, surely we will too? Right?

Remember when everyone in the car world was running around like something from a biblical epic, gnashing their teeth, wringing their hands, because they thought that judgment day had arrived and this was it, the auto world was coming to an end. Well, tell that to the Germans. While car sales in America are still in the “not so good” territory, German car sales went UP by 19.4 percent in April. That rise compares with a frightening 37.4 percent drop for U.S. car sales in the same month.

Analysts believe that the bump in sales for Germany is largely due to the government’s incentive scheme to scrap old cars and buy new ones that was introduced in February, what is termed here in America as a “cash for clunkers” program. The 19.4 percent up-tick in April, which translates to about 380,000 units, followed a 40 percent leap in car sales in March to around 401,000 units. New car sales in Germany during the first four months of the year are at their best level since the record year of 1999.

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