Jul 29, 2009

Cash for clunkers?

On one hand, the new government-imposed program allows consumers up to a $4500 credit for trade-in of an older vehicle toward the purchase of a new “more fuel efficient” vehicle.

Sounds like a nice idea. It’s already helped to boost new-vehicle sales, which is great for the struggling car dealers.

This program demands that dealers kill the engine of the trade-in vehicle by pouring a mix of nasty chemicals into the crankcase and running the engine “until it’s ruined.”

Then the entire vehicle goes to the crusher, in order to reclaim materials (metals, plastics, etc.).

Environmentally sound, right?

On the other hand, all of the components on the old vehicle are gone forever…cores for remanufacturing, used replacement parts that boneyards can sell to low-budget consumers, and depending on the specific components, parts that street rodders or customizers might want for a project build.

This places a financial hurt on automotive recycling businesses (boneyards) and at the very least, inconveniences would-be used parts consumers.

The program will likely also drive up the cost of used parts overall.

While we all want to help the car industry survive and we’re all concerned about conserving natural resources (oil/fuel), in my opinion this program sucks, only because it requires trade-in vehicles to be crushed and lost forever.

Another example of your tax dollars at work.