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CARS slams brakes on recyclers' profits
Auto recyclers not thrilled with "cash for clunkers"
Date published: 8/6/2009
BY BILL FREEHLING Fredericksburg-area car buyers and automotive dealers love the "Cash for Clunkers" program. But area auto recyclers? Not so much. 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 engine makes up about half of their profit, or more by some estimates. "Engines are what keep your doors open," said Mary Howell, executive director of the Virginia Automotive Recyclers Association. "That's where the dollars are." Scottie Davis, part-owner of All Foreign Used Auto Parts in Spotsylvania County, said his company is participating in the program mostly as a favor to the dealers that are among their best customers. He said little of value will be salvageable from the clunkers without the engines. "It's not going to be profitable," Davis said, noting that he has to pick the cars up and dispose of all the hazardous materials. "It's something I have to do as a service." Davis doubts the initiative will have much of an environmental effect. What it will do is raise the price of used auto parts, particularly used engines. Rick Morrow at M&M Auto Parts in Stafford County agrees, though he's 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 Morrow, who owns the business with his brother. The program also requires a ton of paperwork, noted Fay Elliott, who owns Lew's Auto Service & Salvage in Thornburg with her husband. She agreed that the program will make auto parts harder to afford. "I don't think much of it," Elliott said. Bill Freehling: 540/374-5405
Date published: 8/6/2009
Profit Should Be Possible
(posted by
Ed0h
, Aug. 6, 2009 5:22 pm)
Most of these 'clunkers' are sold to scrap dealers through an auction process. Buyers would not pay more than their profit needs allow. Also, engine attachments such as fuel systems, manifolds, water pumps, etc can be removed and recycled as used parts.
WHAAAAAAAAaaaaaaaaaaaaaat???????
(posted by
Einstein
, Aug. 6, 2009 9:52 am)
this sounds like the abortion bill
(posted by
oldlady
, Aug. 6, 2009 7:58 am)
Kill, steal and destroy! We are killing and destroying the cars so there is no life left in it and the government is stealing the money from us (tax payers) to pay for it.
We have got to stop OUR government from continuing to spend OUR money and making it look like a birthday present that is free. Those "clunker" dollars are coming from all of OUR paychecks. It is not free money. Wake up USA.
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