Despite the attempt to boost the economy via auto sales and trying to protect the environment as best as possible, many folks are very much up in arms about the new CARS (Car Allowance Rebate System) program—especially those in the aftermarket auto industry.

The rules placed on the vehicles eligible for the rebates are not the only regulations put in place. The folks who are going to be receiving the “clunkers” have specific rules as well. The bottom line is that the vehicles are destroyed so they cannot find their way back on U.S. roads. This has many if not all auto recyclers upset about the program. In fact, they downright despise it. The salvage (or recycler) industry argue that the program will hurt their bottom line.

New car dealers are advised to replace the oil in the clunkers with a sodium silicate and to run the motors in order to seize them. This ultimately destroys any and all parts that can be removed from the engine before being sold to a scrap yard. Since engines and drive trains make up about sixty percent of the business acquired by the salvage industry, industry leaders argue it would significantly hurt the industry. All of this comes after one of the worst years in the aftermarket industry’s history where more than a dozen auto-supply chains had filed for bankruptcy.

Additionally, not only do the regulations on destroying the vehicles hurt the salvage industry, but it is also affecting the low income customers who can’t afford newer cars even with the rebate program. The crushing of the vehicles will destroy parts, which will minimize the availability of salvaged and refurbished parts, and in turn cause prices to go up for any remaining parts. The rise of these prices would even hurt low income customers that use the parts to keep their vehicles running.

In terms of the effect that this program may have on the market of classic Japanese vehicles is a little bit unseen. With the regulations placed on the vehicles that can be traded in, it’s safe to say that an old Mazda RX-2 that is in a garage somewhere will not be destroyed. It would also be unlikely that there will be any Datsun’s hanging out of a dumpster at the dealership. However, cars that are not yet considered classics may be harder to find in the future.

Even though this program is meant to help the industry, it’s hurting at least an equal percentage. It’s great that the auto dealerships have seen a rise of thirty to fifty percent rise in sales because it will definitely fueling the economy, but for every car that is traded and destroyed a countless number of parts are also being wiped off the face of the earth. How this ultimately affects the economy and people’s lives is yet unknown, but let’s hope that there are more positives than negatives that come out of this.

Do you want to find out how to qualify for the CARS (Cash for Clunkers) program? Read our article on the program rules.

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