Cash For Clunkers Program Hits A Wall

clunker_4801Cash For Clunkers Program is hitting a major wall as once again we see the absolute inefficiencies of the government to run ANYTHING in the private sector. Bogged down in red tape, corruption, and paperwork- the dealers who instigated this program to receive $3500-$4500 rebates from the gov’t to help revitalize the car industry, have been overwhelmed with slow server responses, very slow rebates, and now maybe even a stoppage to this week old program.

They also don’t know what to do about the mounting pile of clunkers that have been MANDATED to be destroyed, even if they are still running.

Here is an excerpt from the article…

“There is absolute frustration across the board,” Alex Kurkin, a lawyer based in Miami who represents several car dealerships, tells The Lede today. “As of this morning, they’re not really confident about any deals, and no one can give them advice about what they should be telling their customers.”

It is still not clear what the outcome will be- as this will destroy the parts that could have been sold to help maintain existing older cars as well as remove affordable running cars from society where many people cannot afford new ones. There is a huge demographic of people who can’t afford more than a $4000 car - but once agian, this program will cause a shotage to the people who need it worst.

Today, dealers are frantically trying to move the old trade-ins to the scrap heap so that they can get reimbursement before the money tap shuts off. Until they can certify that the car has been decommissioned, they cannot submit their paperwork to be repaid.

In any case, Ms. Maggio said, dealers are “hitting the panic button” today.

“Oh my God, what a mess today,” Sally Ann Maggio, who co-owns Hackensack Auto Wreckers, also in New Jersey, said on Friday. We visited her car-crushing business on Thursday. She didn’t think much of the program to begin with.

Ms. Maggio said she generally makes her profit by reselling the engines, the most valuable parts of the cars she takes, but that’s not posible with the cars coming to her because of the cash for clunkers program, because they have been rendered unusable. That cuts down the salvage value of the cars — and the incentive for salvage yards and wreckers to take them — to almost nothing, considering the time and energy they must spend in going to the dealer, towing back the dead cars, removing the engines, crushing the bodies and shipping them to a metal scrap shredder and recyclers.

And, of course, the process reduces the supply of used engines for people who can’t afford to buy a new car and come to the salvage yard looking to fix up old ones.

How is this supposed to clean up the environment again? Destroy perfectly good cars (not all of them are ready for the junk yard!), use energy to remove them from service, energy to recycle them, energy to manufacture new parts because of the shortage of old parts, etc., etc.

My proposal- get the government to subsidize installations of inexpensive HHO generators in the cars instead. That would only cost $400-$800 tops, clean up the environment, increase the gas mileage, and help people who can’t afford a new car to save money…

But then that solution wouldn’t help the new Government Motors corp (GM). Read the rest of the article here…

Bob Volk, CEO
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