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Scottie Davis, vice president of All Foreign Used Auto Parts in Stafford County, believes the CARS program won't help companies like his.
Engines, like these in All Foreign Used Auto Parts' warehouse, often account for half the value of a salvaged vehicle. |
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
Email: bfreehling@freelancestar.com
