In the effort to help the auto industry and the environment, President Obama may have created a concern about automotive parts and junk yards. The current economy has hit the auto industry rather hard. Car sales have plummeted, especially new car sales. And over the past several years, we have all watched fuel prices rise to unbelievable heights.
As a solution the Obama administration has started a program that will offer $4500 credit to car buyers that buy a more fuel efficient vehicle then the one that they currently own. But what happens to the old car once the buyer has left the lot with their new automobile? The car dealer has to destroy the car prior to selling it to a junk yard.
The two most lucrative parts of car for a salvage yard is the engine and drive trains. These are the two parts that are destroyed by the car dealers. The government has suggested that a sodium silicate solution should be run through the engine prior to the vehicle’s arrival to the junk yard in order to make the car inoperable. This is not good news for all the junk yards out there.
The junk yards cannot compete with the money that government offering car buyers. And since they are losing the two most expensive parts of the car, many salvage dealers feel that they will not make enough profit on taking the cars once they have been made inoperable in this way.
The junk yards have to process the cars that they receive so that is added to their costs as well. If they can only sell the smaller parts remaining on the cars, it is just not worth their effort. Some junk dealers believe that they might make more crushing the cars then worrying about processing them and reselling the parts.
The program favors the middle and upper class because not too many people in the lower class can afford a brand new car. And many citizens in the lower class know about automotive parts and how to get their cars running. If there is dwindling amount of older cars, it could undermine their opportunity to provide transportation for their families.
