Automotive Recyclers Association points out “dangerous loophole” in bill; Edmunds.com said fuel efficient claims aren’t as strong as they seem.
The Automotive Recyclers Association (ARA) this week said that the proposed "Cash for Clunkers" bill currently being reviewed by Congress is a “dangerous move that opens the door for criminal activity from the resale of the retired cars to the public."
The ARA said it opposes the provision to make "Cash for Clunker" vehicles publicly available and states that a dangerous loophole in the bill is created by laws currently on the books in more than 35 states that allow the general public into salvage auctions to bid on salvaged or non-repairable vehicles, rather than only licensed dealers, automotive recyclers or scrap processors. If the "clunker" vehicles are processed here, there are little to no controls in place to prevent unlicensed individuals who may, illegally and without regard to the environment or safety, purchase these vehicles to put back on the nation’s roads or export them to foreign buyers for significant profit – fleecing the American taxpayer, according to the ARA.
The salvage pools are much different today than five or 10 years ago, says the ARA. It is estimated that more than 30 percent of the total-loss vehicles sold are exported to foreign countries. Therefore, by broadening bill language to include the salvage pools, Congress significantly diminishes the overall health and safety of the general public and the environment, as untrained, unregulated and ill-equipped individuals — rather than licensed automotive recycling professionals or scrap processors — attempt to handle, dismantle and dispose of environmentally-harmful, waste-stream products and hazardous materials. By allowing unlicensed individuals to purchase these vehicles, it also helps the criminally minded to prosper at the taxpayer’s expense, says the ARA.
"Once again, Congress’ haste to act in these difficult economic times is leading to whole array of unintended consequences," said Automotive Recyclers Association’s Executive Vice President Michael Wilson. "This is truly something that should go through the regular legislative process with committee hearings and full floor debate."
Automotive information website Edmunds.com also issued a statement on the proposed bill this week, saying “Cash-for-Clunkers” still needs work. Having reviewed the latest “Cash-for-Clunkers” details, Edmunds.com said it has some serious reservations.
“Because this program aims to achieve both environmental and industry goals, it falls short of both,” said Edmunds.com CEO Jeremy Anwyl. “If the administration is serious about boosting car sales in order to jump-start the economy, it can do much better.”
Anwyl asserts that the program must be focused on attracting qualified new car buyers to the marketplace. The current proposal is unlikely to be of interest to typical new car shoppers since it offers only up to $4,500 for a vehicle that must be scrapped. The proposed program targets older vehicles; usually owned by consumers who cannot afford a new car.
“At best, the program will encourage some people to stretch beyond their means – one of the very problems that caused our economy to collapse,” Anwyl noted.
Edmunds.com also believes the fuel efficiency gains are less dramatic than they might appear.
“The current system of measuring a vehicle’s efficiency by miles per gallon creates an inaccurate perception about fuel consumption,” explains Paul Seredynski, executive editor of Edmunds.com. “In truth, as people’s mpg ratings rise, they do not do so proportionately.”
To get the $4,500 rebate, a driver can replace a car that gets 12 mpg for one that earns 22 mpg, which saves 3.8 gallons per 100 miles. However, another driver who improves fuel economy from 18 mpg to 28mpg also qualifies for the $4,500 rebate while only saving 2.1 gallons per 100 miles, Edmunds.com explains.
