January 09, 2009
Associations oppose 'Cash for Clunkers' program
Seven trade associations representing the
automotive aftermarket are opposing
inclusion of a "Cash for Clunkers" program within the economic stimulus plan
currently being considered in Washington, D.C.
According to the Specialty Equipment Market Association (SEMA), Cash for Clunkers would use taxpayer dollars to purchase and crush
older vehicles into blocks of scrap metal. "There is no evidence that the program will achieve the stated goal of
boosting new car sales."
In a show of solidarity, the seven groups submitted a joint
letter to the U.S. Congress urging lawmakers to reject a program that "for
no proven value would do significant harm to the automotive aftermarket," a $285
billion industry that employs approximately 4.5 million Americans in all 50
states.
The seven groups are: SEMA, the Tire Industry Association, the Automotive Aftermarket Industry Association, the Automotive Engine Rebuilders Association, the Automotive Parts
Remanufacturers Association, the Automotive Warehouse Distributors
Association and the Automotive Transmission Rebuilders Association.
"These programs have been generally rejected by the
states since they are not a cost-effective means to improve fuel mileage, reduce emissions, or spur to new
car sales," the groups wrote. "Conversely, Cash for Clunkers
programs threaten jobs in the automotive aftermarket since they remove the
opportunity to repair and upgrade existing cars and raise the price of used cars
and parts."
According to the
aftermarket letter, Cash for Clunkers is a "sounds good" idea that has been
around for at least two decades. Upon closer scrutiny, it has always been
rejected by Congress for the following reasons:
1. Clunker programs focus on a vehicle's age rather than a
vehicle's emissions, based on the erroneous perception that all older cars are
dirty cars. However, there are no actual emissions measurements taken for cars
that are scrapped. Rather, the programs "estimate" emissions reductions,
numbers that are significantly overstated.
2. Clunker programs rarely capture the "gross polluter," an
improperly maintained vehicle of any model year, which puts out dramatically
more emissions due to poor maintenance. Those seeking a quick fix through
vehicle clunker programs ignore this reality.
3. Clunker programs diminish the availability of affordable
transportation and repair parts to low-income drivers as more and older cars are
crushed. Most low-income individuals will not be able to afford to purchase new
vehicles, let alone more fuel efficient or cleaner vehicles, with the money
provided by clunker programs.
4. Clunker programs compete with charitable organizations such
as Melwood Industries, the Congressionally-chartered Military Order of the
Purple Heart and the Salvation Army that rely on used car donation programs to
fund their programs.
5. Auto restoration, customization and repair shops nationwide
will suffer with the loss of older cars, trucks and parts they need to supply
and service their customers, according to the group.
6. Cash for Clunkers programs risk destroying classic,
historic and special interest vehicles. "America safeguards its artistic and architectural heritage against indiscriminate
destruction. Our automotive and industrial heritage deserves the same
protection."
7. Clunker programs do not guarantee that a scrapped vehicle
will be replaced with a more fuel-efficient vehicle. In fact, many older
vehicles get better fuel mileage than the newer models.
8. Cars turned in for scrappage often are rarely-driven second
or third vehicles that have a minimal impact on overall fuel economy or
emissions.
9. There is no evidence that clunker programs boosts demand
for new vehicles, drives traffic to new car dealerships or creates or retains
jobs.
The aftermarket associations
pledged support for legislation to provide tax incentives to purchase new cars
such as allowing deductions for interest on car loans and state sales tax. The
groups also support tax credits to help upgrade, repair or maintain an older
vehicle.
"A number of commercially available products and technologies exist
that will substantially lower the emission rates of older vehicles while also
offering the owner added performance, drivability and fuel mileage. These
innovative solutions drive product sales, produce American jobs and secure tax
revenues for the government -- all while sustaining the multi-billion dollar motor
vehicle aftermarket," the groups concluded.
Sign up for our Enews and receive the latest news, trends, and product information right in your e-mail inbox.