Not everyone is so happy about the “cash for clunkers” programs. The three groups of unhappy and concerned people are scrap yards owners, used engine suppliers and consumers of used engines for clunkers.
Many thousands of Americans have showed up at auto dealers in the past two weeks to turn in gas guzzlers for more fuel-efficient vehicles under the Car Allowance Rebate System, or CARS. Area auto dealers say their sales have spiked.
The federal government offers up to $4,500 toward the price of the new car for people turning in clunkers that get less than 18 miles per gallon. The $1 billion originally allocated to the program went so fast that the House has approved a $2 billion extension. The Senate may vote on the measure by the end of the week.
The clunkers that are turned in must be destroyed under the program, which is intended to both stimulate sales of new cars and help the environment by taking gas hogs off the road.
Dealers are required to drain the engine oil out of the clunkers and replace it with a few quarts of a sodium silicate/water mix. Then they must start the engine and run it for a while. That process destroys the engine.
But it also eats into the profit margin of the auto recyclers, whose business involves taking the parts out of used cars and selling them for reuse. The used engines make up about half of their profit, or more by some estimates.
“Engines are what keep your doors open,” said Brian Hanson, owner of GotEngines.com, a North American Based engine supply company.. “That’s where the dollars are.”
The cars are of little value after destroying the engines, little else will be salvageable from the clunkers without the engines.
It’s not going to be profitable, most of the salvagers of used engines say, noting that they have to pick the cars up and dispose of all the hazardous materials like mercury switches. It’s something we have to do as a service
Most salvage yard owners have doubts that the initiative will have much of an environmental effect. What it will do is raise the price of used auto parts, particularly used engines.
Most of the salvage yard who supply used engines for clunkers are glad the program is helping local car dealers. But it won’t do much for his business.
“We don’t see this as being a big bonanza,” said Hanson.
The program also requires a ton of paperwork for the actual dissmantlers. All agreed that the program will make used engines and auto parts harder to afford.
One thing remains the same in this situation, GotEngines.com is committed to working even harder to finding the used or replacement engine you need. Clunkers will be a priority for GotEngines.com, not all folks can shell out the difference in cash for a new car even with the rebate. Worse, not everyone can even get credit with the economy hurting so bad.
