Oprah Winfrey gifted free cars worth $28,000 to her entire audience — but there was one problem

Oprah Winfrey is one of the most successful names in the media industry and is also known for her philanthropy. The iconic “You get a car! You get a car! You get a car!” has become an unforgettable moment of "The Oprah Winfrey Show". However, the 276 members of the studio audience who were excited to get a brand new Pontiac G6 Sports Sedan soon realized that nothing in this world is free. Turns out the cars came with a hefty tax bill which the winners had to cover at their own expense.

Hidden Costs of Giveaways

Back in 2004, when the episode was aired, The Guardian reported that each car was worth $28,000. Thus, the roaring response from the winners in the studio was more than natural. "Everybody was so shocked that they just didn't know how to respond. It was a really good thing that Oprah had [paramedics] on the floor - I'm fairly young, and healthy, and even I felt like I might have a heart attack," one guest, Tiffany Self, told the publication recalling the moment. 

However, it didn't take long for the joy to subside. The guest explained that the studio producers told the guests off-air that the cars carried a "gift tax" of about $7,000 which they had to pay if they wanted to keep the car. Self shared that she was still getting a 75% discount on the new car, but the tax issue was major for many. "What a coup, there was no other way they could have got that kind of publicity," she said. 

The Other Side of the Story

In 2018, the three-part podcast titled "Making Oprah: The Inside Story of a TV Revolution" further detailed the events that followed the episode. The host, journalist Jenn White revealed that the cars totalling about $8 million were donated by General Motors to be given away. She shared that the concept was first conceived by Winfrey's best friend, Gayle King, who met with an executive from GM's Pontiac brand. She shared that the producers kept pushing the brand until it agreed to gift a new G6 to every member of the studio audience. Furthermore, Winfrey wanted to ensure the cars were given to those who really needed them, thus the producers conducted a screening process to select the audience. 

Finally, in the 19th season premiere, Winfrey first called 11 teachers on stage, to offer them their "wildest dream" of a new car. The host then announced that the 12th car would be given away to someone in the audience who finds a lucky key. The producers gave everyone a box only one of which was told to have the key. However, as everyone opened the boxes, they all had the key. This is when the "You get a car!" moment occurred.

However, the host of the podcast explained, "It was devastating after, because ‘gift tax’ is a thing, and it’s always a complicated thing when you’re giving stuff away." She explained that the show paid for the sales tax and the registration for each car but the gift tax had to be covered by the receiver. She said to make up for it, the producers gave the winners an option to decline the car and take the cash for the car but people still ended up complaining in the press.

“We put our whole soul into this moment of television and with real intention to do something good, and so when people had a negative reaction, it like literally hurt our feelings,” Erspamer concluded on the podcast.