The end of the road is coming for thousands of Ford Explorer s, Dodge Durango s and other so-called “clunkers” that were traded in during the federal government’s Cash for Clunkers program – but crushing day may not come as quickly as the Transportation Department initially required.
The Cash for Clunkers program, which gave federally-funded “rebates” of up to $4,500 to incentivize consumers to purchase new, more efficient vehicles, initially included a disclaimer saying that the vehicles must be crushed within six months of the end of the program. At the time, the American Recyclers Association readily agreed to the rules since it would guarantee salvage yards numerous vehicles waiting to have their parts scavenged.
However, when the program’s budget was expanded to $3 billion from the initial $1 billion and the number of cars traded in eventually approached 700,000, salvage yards saw too much of a good thing: Way too many vehicles to dismantle and, eventually, crush.
“True recycling is using something to its fullest potential and then recycling it over again by making it into steel and sending it out to become another engine or transmission or car,” Jeff Cantor, an auto recycler in Candia, New Hampshire, told the AP. “We’re breaking that circle here by crushing good quality parts. We can’t process them quick enough in six months.”
Numerous reports indicate some salvage yards possessing more than 5,000 vehicles each, mostly SUVs, trucks, minivans and large sedans, waiting to be crushed prior to the deadline early next year. The industry association has asked the Transportation Department to extend the terms of the program to one year, but the federal agency hasn’t officially announced any changes.
“We do have a lot of facilities that have two or three times the number of vehicles they could ever have imagined getting. They’re trying to process these in addition to their regular business,” said Michael Wilson, the American Recyclers Association’s executive director.
Some dealers have still not received payment from the government for clunkers they accepted as trade-ins, which has served only to further back up salvage yards.
Penske sued over refund; class-action suit possible
Westbury Toyota of Westbury, New York, a dealership owned by the Penske Automotive Group, has been accused of not passing on the money it received from scrapping a vehicle to the customer who traded it in. Dealers were supposed to pass along to consumers the trade-in vehicles’ scrap value, minus $50 per vehicle to cover administrative fees.
Automotive News reports that Philip Allegretti of Seaford, New York, received none of the $125 the dealership got when it scrapped a 2000 Chevrolet Astro traded in on a new Toyota Tacoma . Allegretti is seeking class-action status for the lawsuit, which would allow other consumers who purchased vehicles from a Penske-owned dealership to join the suit.
