A new wrinkle in the "Cash for Clunkers" program
By Diana Fairbanks
Tuesday, August 18, 2009 at 1:54 p.m.
Read more: Local, Economy, Business, Cash for Clunkers, Bill Marsh, Diana Fairbanks, Fact Finder, Fact Finder
Cash for Clunkers has proven to be a wildly successful way of getting people to trade in their old cars for more fuel efficient ones. In fact, the government has pumped another two billion dollars into it to keep it going.
But what happens now with all of those clunkers?
They were supposed to be destroyed.
So why are dozens of them lining the back lots at one area dealership?
The answer is tonight's Fact Finder Report.
New cars have been flying off of these lots as more and more drivers take the government up on its cash incentive to replace gas guzzlers with more fuel efficient vehicles.
Dan O'Connor, General Sales Manager for Bill Marsh Auto Group says, "It's been a win win win really for the environment, the customer and us."
But while those lots are emptying out, these are filling up. Rows of dozens of clunkers behind Bill Marsh Price Point in Traverse City.
O'Connor says "we're trying to hide them back here but as the amount of them continues to grow you can see there's a lot of them back here."
80 clunkers and counting. Everything from past prime pick ups to jade green jaguars.
As part of the program these cars must be made undrivable.
So why are so many clunkers parked here instead of put out of service?
O'Connor says "really they're just sitting there waiting for the go-ahead from the government to start disabling them."
Call it the dealer's cash for clunkers insurance plan. The government said dealers could wait to disable the clunker until they received government reimbursement.
O'Connor says, "We've submitted 80 deals. We've not been funded on any but they have been communicating on some that had some errors in them and we've resubmitted them so we're still on hold right now."
And since Bill Marsh hasn't been reimbursed yet, the clunkers are stuck in back lot limbo.
O'Connor says, "We knew going into this partnership with the government there might be some hiccoughs. We still have 100% faith that we're going to get paid for all of them. We haven't even thought about a contingency plan if something goes wrong."
So what is the plan for these clunkers once the government pays up? Smash 'em.
Bill Marsh has contracted with a local metal company. That company will pay Bill Marsh $50 per car, what the government allows, and then the metal company will smash them and get the scrap metal value.
Through the rules of program, the dealer must disable the engine, but other things like fenders and wheels could be sold as parts.
O'Connor says, "We just chose to go with a company that is not going to do that. They're just going to smash them and use the metal."
Diana asks, "As a car guy, does it hurt you a little bit?" O'Connor replies, "it does! It goes against everything I've ever been taught in the car business. I'm going to euthanize these cars and I'm used to fixing these cars so it's different."
So what do you think? What should be done with the clunkers? Leave your comments below.
