“Cash-for-Clunkers…is horseshit beyond repair”

Piles of clunkers do not translate into piles of money

Question: Who would give Cash-for-Clunkers such a harsh assessment? Answer: One of the guys directly impacted by the program.

Bruce Luther of Rock & Roll Auto Recycling in Pleasanton, California apparently expressed the opinion of many wrecking yard owners when he said the “The CARS act, as written…is horseshit beyond repair.”

Why?

Because the Cash-for-Clunkers law requires the car dealer to destroy a clunker’s engine and transmission, which typically accounts for around 60% of a vehicle’s salvage value. Then, after they receive a clunker, salvage yards are given just 180 days to make whatever profit they can from scavenged parts. After that? The law says the vehicles must be destroyed.

Current scrap value is a mere $140 a ton, so the average clunker is worth about $280. But it costs about $200 to “detox” a clunker as federal law requires. That leaves the salvage yard with a net profit of just $80 per car.

Hmmmm. Seems like the thing that should be scrapped is this whole Cash-for-Clunkers fiasco.

Source: Jalopnik.com

Tagged as: cars.gov, cash for clunkers

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