‘Cash for Clunkers’ Wrap Up: What Happens Now?

The government program dubbed the Car Allowance Rebate System (CARS), more commonly known as “Cash for Clunkers,” ended Aug. 24.

Besides loads of paperwork, some sluggish Web sites and pending rebates, car dealerships across the U.S. are calling the government’s Cash for Clunkers program a major success in terms of moving vehicles off their lots, something that has been quite difficult in recent months.

The Cash for Clunkers program was a success for auto dealerships, with about 700,000 vehicles sold as a result. Photo: Amanda Wills, Earth911.com

With the program officially over, dealers can breathe a sigh of relief. The frenzy now moves to the certified disposal facility (CDF), where dealers are required to take the cars traded in with Cash for Clunkers within seven days after getting reimbursed by the government.

Since the red tape prevented reimbursement at some dealerships, clunkers remain on car lots, giving scrap yards and auto recyclers a little more time to get prepared for the influx of old vehicles.

But other disposal facilities are already feeling the impact of the temporary boost that Cash for Clunkers brought to the auto industry. In Greenville, N.C., Foss Auto Recycling says that before Cash for Clunkers, their yard took in around 12 vehicles per week. Now, they say they take in roughly 12 vehicles per day, according to Eye Witness News in North Carolina.

Under the government program, traded-in vehicle engines must be destroyed to ensure that the clunkers’ gas-guzzling internal parts never hit the road again. Therefore, scrap yards and auto recyclers might not see as big of an economic boost, because the highest value of scrapped auto parts comes from the engine and drive trains.

Also, there are estimates that the turned-in clunker vehicles contain more than 1,000 pounds of mercury, making proper recycling and waste disposal a crucial final step for the program. To ensure proper disposal, the government requires “that all toxic or hazardous components will be removed and properly disposed of prior to crushing or shredding.”

With it all said and done, around 700,000 cars were sold thanks to the month-long program and its roughly $3 billion budget. The Toyota Corolla was the top overall seller, while the Ford Focus was the top-selling U.S.-branded car, according to the L.A. Times.

Other countries, such as Russia, are looking into starting programs similar to Cash for Clunkers. After its success, the Obama administration is now considering a similar initiative for upgrading old appliances for those meeting ENERGY STAR standards.