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Cash For Clunkers: Junk Legislation? Page 2


Pile of junk cars

Additionally, the Specialty Equipment Market Association notes the impact the legislation would have on companies that provide parts and service out of warranty vehicles. “Scrappage programs as proposed will also hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country,” said SEMA Vice President of Government Affairs, Steve McDonald. “This industry provides thousands of American jobs and generates millions of dollars in local, state and federal tax revenue. It is time to help the entire auto industry with programs that focus the incentive on the purchase of new vehicles, not destroying valuable old cars and parts.”

Cash For Clunkers programs in Germany and Britian have been popular, and German legislators have actually had to more than double their program's budget. The German program is based soley on a vehicle's age and does not guarantee the vehicle is scrapped. In theory, one could trade in an old Golf diesel for a Porsche Caynne and get a check, while the old oil burner gets sold to somebody in the old Warsaw Pack. The net gain to the environment under this scenario is negative.

Real questions need to be asked;

  • Whether accelerating the turn over of the existing U.S. fleet is actually good for the environment (taking into account the environmental cost of scrapping an old vehicle and manufacturing a new replacement, like the sweetheart of the eco movement, the 2010 Toyota Prius)
  • Whether it makes sense for the U.S. budgets to go further into debt to artifically stimulate new car sales
  • Whether the economic benefit of any bump in new car sales is worth the trade off hit that will be taken by those who do business and/or drive used cars

This is all good food for thought.  Yours are welcomed below...


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Comments (7)
  1. The impression that the entire vechile would be scrapped is inaccurate, at least in one version of the legislation. Only the engine and transmission would have to be destroyed, the rest becomes FREE PARTS for the companies that pick up the 'voucher' vechile. It would actually be a BOON of free to low cost parts to any industry dealing in used car parts. And for the cars that remain on the road because the voucher was inadequate to help the owner, a flood of easy to get parts would become available.
    Assuming Edmunds' info is fact checked at the recent date of publish:
    from: http://www.edmunds.com/industry-car-news/cash-for-clunkers.html
    "What happens to the car that you trade in? The old car is given to a salvage operator. Vital engine and transmission components, that would otherwise pollute more than a modern engine, are destroyed so that the car does not end up on the road again. The salvage operator can then sell off any remaining parts on the vehicle. The destroyed engine and transmission can also be sold to recyclers." Wouldn't that sounds like "KACHING" to the salvage, used parts, and recyclers industries?
     
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  2. This bill will put an end to charity car donation in the nation since the amount of the voucher would be sp much greater than the tax deduction and most donated cars are "clunkers". The solution is to simply allow the charity to issue the voucher in lieu of the tax deduction. The charity would then junk the car in accordance with the bill. This way, everyone wins, the car dealer, car maker, car buyer and the charity.
     
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  3. How about a Cash for Congress bill. Everyone in the state gets a check if they throw out any member of Congress who voted for this sillyness. Stay out of the way and let people choose what they want!
     
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  4. How does a charity win if they have to scrap the vehicle? Charities want donated vehicles so that they can put them to good use.
    This CFC is way too meddlesome.
     
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  5. I don't qualify because my car already gets good gas mileage. But my dad swears by the car buying process here:
    http://excarsalesman.typepad.com/
    I have a feeling dealers are going to automatically increase prices because of the increased demand (artificial) for great MPG cars. So the thousands of savings from this bill for consumers is not entirely accurate.
    With the price increase, I'm certain some markets you'll come out even as if they never offered this voucher. It is poorly written legislation.
     
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  6. Before SUVs became popular, and then demonized, they actually had purpose and function that consumers wanted. I still like the function of a high clearance vehicle, with four wheel drive and the ability of towing a large load. With approval of the clunker bill how far are we from getting government permission to buy a low mpg vehicle like a truck or SUV? I can already see the ten page form.
     
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  7. There are many dealers who would buy your unwanted vehicles and junk vehicles for money for the reason that these are make use of for recycle purpose. So instead of promoting them to a local dealer search for dealers on-line which will directly offer you money for junk cars. It is always a better choice to obtain money for your car directly from the very first dealer and not promoting your car towards the middleman.

    http://www.junkcarscash.com
     
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