Cash for Clunkers: Will the bill create harder times for torque converter rebuilders?
Recently Congress passed C.A.R.S., Consumer Assistance to Recycle and Save Program, also know as Cash for Clunkers. The bill boasts a number of benefits for the environment if the bill increases in popularity with the public, but what effect will it have on the rebuilding industry?
A short overview is this: If you own an older vehicle earning less than 18MPG, and you purchase a new vehicle earning an additional 4MPG, while also forfeiting your old vehicle to the dealership, you may qualify for a rebate of $3500-$4500. Of course there are additional requirements of the consumer, like time of ownership, vehicle classification, etc. There are also requirements on the dealership. They must become certified for the program, and they are not allowed to resell the traded in vehicle. It must be destroyed.
So how many people would take advantage of this offer? In most cases, I would assume most consumers would need financing to purchase a new vehicle. And in a market still hindered by a tight bank belt, this may be difficult for a consumer to find an affordable loan. On the other hand, if the vehicle is an older model, and paying for a new transmission or significant repair would significantly out-weigh its worth, why wouldn’t it be cost-effective to turn over the car to a dealership knowing the rebate will be higher than the vehicle will ever be worth. An innovator of the program, Paragon Cars, one of the largest dealerships in the USA, had local and regional economic effects when it introduced its own program.
Will this program reduce the number of torque converter rebuilds required by the general public? Would enough consumers participate in the government program to boost the automaking industry while also hindering those dedicated to rebuilding—and also repairing—older parts and models?
What are your thoughts? Let us know if you support the bill, if you are opposed, or somewhere in between.
Melissa Hall, Editor