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Cash for Clunkers could drive up costs for used parts

Destroying engines puzzles some auto and salvage dealers in the Miami Valley.

Larry Taylor on Friday, Aug. 7, stands among just some of the 105 cars he says are waiting for payment from the government's Car Allowance Rebate System, better known as Cash for Clunkers.

Peter Wine/Contributing photographer Larry Taylor on Friday, Aug. 7, stands among just some of the 105 cars he says are waiting for payment from the government's Car Allowance Rebate System, better known as Cash for Clunkers.

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By Katherine Ullmer, Staff Writer Updated 7:20 AM Monday, August 10, 2009

The Cash for Clunkers program has new car buyers flocking to area showrooms, but some local salvage yard owners worry that program could spell higher costs for used parts.

“Used parts are going to be fewer and fewer,” said Richard Harris, owner of Valley Auto Parts in Dayton. “It’s hard to stock a yard even if you have 1,000 cars,” he said, because “parts don’t interchange any more,” and there are so many makes and models.

Although Harris is registered with the government program to take clunkers, he’s not sure it was well thought out. The program requires the destruction of the clunkers’ engines and drivetrains.

“It just don’t make sense to lock up a good engine and destroy a good car,” said Harris, who hasn’t received any cars yet.

Tim Caldwell, owner of Dayton Xenia Auto Parts in Xenia, also is an approved yard for the clunkers but said he’s not accepting the vehicles because of safety concerns.

Caldwell said he learned this week through a government safety bulletin that disabling the motors yields a toxic substance when the components melt together that could cause skin irritations and be hazardous to workers in unventilated areas.

Caldwell also predicts that consumers will see an increase in the price of used parts for SUVs and trucks because there’s going to be fewer parts available.

Another local salvage business is declining to participate in the program, but for a different reason.

Chuck Adkins of Adkins Auto Salvage in Miamisburg said he was deterred by all the rules. Salvage yards may not sell the engines and drivetrains, and the cars have to be kept separate from other vehicles the business receives, he said.

“In the future, if someone needs a transmission, they’re going to pay quite a bit more for it,” he said in answer to questions about higher cost. Used transmissions generally sell for $300 to $500, while new ones cost around $2,500, he said.

Some local car dealers also question the overall merits of the program.

“It’s working OK, but on the whole it’s probably not working as intended,” said Jim Taylor, owner of Troy Ford Inc. in Troy. “We’re not getting real clunkers. The cars we’re getting are still drivable.”

Of the 25 cars they’ve gotten, “15 or 16 I would have retailed or given to somebody in need of a nice car,” he said.

Most purchases seem to be for a second or third car and not a first car, and more than half of the buyers are paying cash, Taylor said.

“It’s a pretty good deal for consumers, but these people probably would have bought from us in the future (anyway),” he said.

Taylor also said he is not sure the other $2 billion approved this week by the legislature was needed.

As it is, his inventory is almost depleted.

Troy Ford is a small dealership that normally carries about 60 cars, he said. “I only have 17 in stock now.”

Taylor said his dealership normally sells 20 to 22 vehicles per month but has sold 25 since the program started a few weeks ago.

“I can’t sell 25 or 22 (vehicles) a month because we don’t have them,” Taylor added.

Taylor said his allocation of new cars was through September, so by the end of next week, he will have only five to eight vehicles left to sell.

The vehicles that he has been reimbursed for so far have been transported by Sandy’s Towing to Franklin Iron & Metal on First Street in Dayton to be shredded, Taylor said.

Sandy’s Towing contracted with Franklin Iron & Metal to haul clunkers from about 25 dealerships in the area, said Doug Thoma, co-owner of the towing company. “We’ve towed about 200 cars,” he said. “That won’t even touch what’s sitting on the ground waiting for the government to pay the dealers. Some dealers have 40 or 50 cars sitting on their lots.” In the first five days of the program, we towed about 40 cars a day, he said.

“It’s a real good deal for me,” Thoma said. “It’s boosted our business 10 percent.”

Larry Taylor, owner of Beau Townsend Ford in Vandalia, said as of Friday, Aug. 7, his is one of the dealerships wanting to call the towing company.

Taylor said he has 96 clunkers sitting behind his Nissan sales lot. “I appreciate the program but I just haven’t been paid by the government. I’m ready to call Sandy’s to say come and get 96 cars, but I’m reluctant to call and have the cars crushed before I get paid. There’s close to half a million dollars there.”

With approval of the new stimulus money, he’s hoping to be paid by Monday.

Contact this reporter at

(937) 225-2341 or

kullmer@DaytonDailyNews.com.

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They want to remove the engines that have no RFID tracking, so when the government comes down to force controls on you, you will have no way of excape.
DO YOUR OWN RESEARCH AND KNOW THE TRUTH AND GET READY FOR BIG CHANGE IN 2009-2012.
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If you do not know God you better start now wile you still have a chance.
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napier
3:04 PM, 8/20/2009

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Sounds like these comments are from the people paid by pharma to shout out town hall meetings across the country. So wrong, but it works.

I wish there was a political philosophy for people who study economics and finance. Conservatism is an Accounting principal that is not followed by "conservatives".

Look up "Public Good", "Private Good", & "Competative Market"

CA
4:11 PM, 8/10/2009

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everything came so quickly and with the talk of the program running out people are making a dision to buy a new car and have a car payment that ordenarly would not have made the dision to buy a new car so I look for at least one third of these cars to get repoed than where are those people going to be-- wishing thay had kept a car that there was nothing wrong with Good job president is he honesty tring to help us or hurt us I DONT SEE ANYTHING GOOD COMING OUT OF ANY OF ALL THIS MONEY SPENDING!

hilldale
1:54 PM, 8/10/2009

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Dumbest idea. Do you realize some vehicles people turn in only get a mile or two less per gallon than the new vehicles they purchased? The program goes bust in a matter of days rather than months. We now have to destroy and fill landfills with tons of junk that we destroyed on purpose! By the end of the year, no one will be buying cars, putting us right back to the horrible econony Obama is not helping. -extremely poor leadership. Wake up, America!

what a a waste
12:34 PM, 8/10/2009

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If this was truly about being greener then hybrids should be the only cars bought to replace these so called gas guzzlers. If you put more than your @%* and gas in a vehicle they will last as long as you want to keep them. Destroying good vehicles that can be used for parts is like ECheck, another government idea that was supposed to take clunkers off the road. We see how that worked. Sadly those that work for american car companies will still buy foriegn makes and wonder why they get laid off.

I'll keep my old cars
12:04 PM, 8/10/2009

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