I’ve been wondering what happens to a vehicle after it gets turned in for a $3,500-$4,500 government handout. A good friend of mine (and fellow Lost Republican) was one of the late takers on the government plan to rid the world of big gas guzzling SUVs. My buddy turned in an aging (yet still very good) Ford Explorer. Granted, they got a spiffy new vehicle and saved a few bucks, but now a vehicle that could have been used by someone in need will meet an untimely demise.
It turns out that the dealerships effectively “kill” the clunker by dumping something called sodium silicate into the running engine. It gums up the engine and renders it permanently useless.
I was pleased to learn, though, that the vehicles will be stripped by certified salvage companies, so parts of these vehicles will be re-used and recycled. At least all is not lost.
In my mind, though, I’m not sure if this program was really all that great. Glad to know that some people got nice new vehicles out of the deal and dealerships had a brief respite from the recession. But here are my two primary questions about the now-famous “cash for clunkers” program:
- Will the government efficiently reimburse car dealerships for the so-called “rebates” that are due to them? Many dealerships are family owned, and are fronting the cash on these deals.
- What happens now after we created this kind of short term false demand? This seems less about getting the economy going and more about telling us what kind of vehicles we should drive. Did Detroit pump out new vehicles, or was this more an exercise to get aging inventory off of dealer lots?
For the record, we’re keeping our clunker. Our massive SUV has 120,000 miles on it. It’s paid for. It has new tires and new brakes. Sure, it gets a paltry 14 mpg, but it would take a long time to recoup the cost of a new vehicle in terms of fuel savings. Plus, we really really like the safety of our big honkin’ SUV.
KOB TV in New Mexico did a great story on the death of clunkers. Check it out: http://tinyurl.com/mgprst – Dealers begin disabling clunkers
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