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.

Even though the program started a month ago, the 136-page rulebook with detailed regulations was released just this last Friday, and by the looks of it, there are very stringent obligations if anybody is interested in taking advantage of this deal.

If anybody has a car to be traded into the Cash for Clunkers program, it must be a 1984 model year or newer. This can be tricky however; for example, if the car that is being traded was manufactured in July 1984 and the new vehicle was manufactured in August 2009, it will not qualify. The trade-in and the new vehicle must be less than 25 years of each other to the month of manufacture.

The fuel economy of the trade-in must have a combined city and highway rating of 18 mpg or less. (The fuel economy of any vehicle can be checked at this website: www.fueleconomy.gov.) One exception to this rule is the case of work trucks which may not have been rated for fuel economy and will be judged by instead by age. They must be from 2001 or earlier, but also be within the 25 year mark.

The total amount of the refund will be determined by how much of a difference there is in fuel economy between the two vehicles. If the difference 4 mpg and 10 mpg there is a $3,500 credit; if it is more than 10mpg then there is a $4,500 credit.

Even with all that said, don’t go to the dealership thinking and expect to take the old ’89 Ford Bronco that’s been rusting away in the backyard and expect to get $4,500 for it. The most overlooked rule is that the vehicle being traded in must be in driving condition, registered in a timely manner and insured for at least a twelve full months prior to the trade.

Qualifying purchases must be model year 2009 or 2010 and can be purchased or leased. However, if leased it must be leased for at least 5 years. The new vehicle also has a maximum MSRP cap of $45,000, so your dream Skyline GTR will not qualify under the program.

There are a lot of different and precise requirements for qualifying for the rebates, so make sure to research as much as possible before taking the plunge. All of the regulations and FAQ’s can be found at the official Government page: www.cars.gov.

The press release indicates that their actions are in response to, “the recent extreme downturn in the world’s banking market”. It further states that GReddy will not be exhibiting in this years SEMA Show.

Although much of the products from TRUST and GReddy are developed and manufactured with newer makes and models in mind, they still manufacture and sell performance parts for older makes and models. In addition, many Japanese classic car enthusiasts swap out factory engines for more favorable late models, so news of a large aftermarket manufacturer potentially failing would upset the industry.

TRUST has been in business since 1976 and founded GReddy in the U.S. in 1994.

PRESS RELEASE

GReddy looks forward to continuing to provide quality high performance parts for years to come.

IRVINE, CA
OCTOBER 10, 2008

To insure the long term survival of the GReddy brand in the USA, GReddy Performance Products, Inc. has opted to file for Chapter 11, Reorganization, on October 10, 2008.

GReddy sales, customer service, R&D and operation will continue to conduct business as usual, through this process. The flow of inventory and new products will continue and will not be affected. Normal GReddy operating hours will remain as before.

This reorganization change is result of last month’s Minji-Saisei-Hou filing of GReddy’s parent company TRUST Co. LTD. in Japan. Although TRUST has now returned to production, and GReddy Performance Products has maintained normal business practices, the recent extreme downturn in the world’s banking market has made this option the best prospect for continued operation and expansion of the GReddy brand.

It is also in the best interest of GReddy’s future to join some of GReddy’s competitors in the industry, in not exhibiting in this years SEMA Show. The withdraw is regretful, but necessary. This does not however mean development and construction of new products and demo vehicles which were planned to debut at SEMA will stop. Instead, GReddy plans on releasing news of these items through other media outlets very soon.

GReddy Performance Products, Inc. and it’s staff would like to thank all the kind well-wisher, customers and industry associates for their support in these challenging times. GReddy looks forward to continuing to provide quality high performance parts for years to come.