So the “cash for clunkers” stimulus program seems to be successful (TNT, 8-3). Once again we’re using our tax dollars to help big business pull itself through this recession.
But what about small business? As an independent auto dealer, I and many others like myself are being hamstrung by this program.
Let me explain.
When a vehicle is traded in at a new car franchise, that vehicle is re-introduced to the market either by dealer resale, a dealer auto auction or a dealer-to-dealer wholesale. This is how we get our inventory. It is also how we support our families and stay in business.
Since this recession started, there has been a shortage of used cars because so few people have been trading them in for new ones. Anyone doing what we do will admit that it has been tough.
Along comes the “cash for clunkers” program, and new car dealers are selling cars again. The program has been so successful that when the allotted funds ran out in one month instead of the projected four months, Congress re-funded it by an additional 200 percent.
Here’s the problem. When a vehicle is traded in as part of this program, the government mandates that the vehicle be destroyed. The engines must be chemically seized and the carcasses sent off to a wrecking yard.
If used cars have been hard to acquire before, consider that in one month the government estimates that 250,000 cars have been set for destruction nationwide. Now Congress has given the OK for another 500,000. That’s an average of 15,000 cars per state.
The original intent of Congress was to get the gas guzzlers off the road, and I’m all for reducing our dependence on foreign oil. But I’ve seen many of the vehicles that will be destroyed, and they aren’t the Suburbans and huge F250s that you would imagine.
They are Hondas and Acuras and Toyotas with V-6 engines. They are Jeep Cherokees and Ford Explorers. Many are newer, well-maintained and have plenty of life left in them.
Consider also the person who can’t afford or doesn’t qualify for a new car payment. The used car he once could afford will be much more expensive due to supply and demand. Credit availability is also much more restrictive now that the banks have been in such disarray. (New car companies generally have their own finance divisions.)
If we spend our tax dollars on a stimulus program that actually works and auto manufacturers benefit, great. But why cripple the used car industry at the same time?
If we want to get rid of the gas guzzlers, stop making them. The rest will soon go away, and we won’t have to destroy a low-mileage five-year-old family car because it qualified as a “clunker.”
Jeff Hibbard is the owner of Steel Wheel Autos in Tacoma.
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