The Cash for Clunkers Ripple Affect

By Keith Boles - bio | email feedback

JONESBORO & HOXIE, ARKANSAS (KAIT)

The government sponsored *CARS* program or "Cash for Clunkers" got underway Monday.

People are trading in their older gas guzzlers for credit and a newer lower mileage cars.

But taking the older cars out for scrap sends out ripples both good and bad.

In the past couple of days I have seen both sides of the coin.

The salvage dealer says it will be a good thing for his business, on the other side of the coin the small *buy here pay here* kind of used car dealer is not nearly as optimistic.

Lack of available cars is a problem for both right now.

Adam Pratt, Owner, Pratt Salvage in Hoxie, "There is actually no auction around here right now that you can go to and buy cars, wrecked cars. "

Bobby Hinton, Owner Hintons Used Cars, "If the used cars aren't coming in as trade-ins then we don't have anything to put on our lots. "

The *CARS* program goal is to get the older less fuel efficient cars off the road giving up to 4500 dollars toward the purchase of a new car. The traded in cars have to be scrapped.

For auto salvage companies like Pratt's in Hoxie having this influx will be a boost. Co-owner Adam Pratt's says he sees these cars as more than just scrap metal.

"All the fluids are drained out of them when we pull them into the shop, and they're all sold. The oil is recycled, the gas is recycled, everything is recycled, yes everything is sold. "

Pratt's salvage yard is full of cars that have been stripped of sellable parts. Each part is tagged and stored, out in the lot each body in the inventory is listed as available for parts then in time,  the vehicle is crushed and scrapped.

Pratt, "If they are a real fast mover they won't last a year. We'll crush what's left of it and sell it to a smelter."

It's high mileage trucks like a pickup with over 200 thousand miles on it that the Cash for Clunkers program is trying to get off the road. But for small car dealers like Bobby Hinton here in Jonesboro, vehicles like this are their bread and butter.

Hinton "You know when they take those vehicles off the market it will definitely hurt our inventory for a little while. I can see what it's trying to accomplish and what it's trying to accomplish is a good thing."

Even if you get the 4500 hundred for your older gas guzzler without good credit you will still have a hard time buying a new car from a dealer. But with no or very few cars available for self financing dealers Hinton says..

"People can't afford to go buy a new one. All they can afford is what they are fixing to scrap and destroy and they are not gonna have the vehicle to go up and down the road in. "

The basic requirements for the credit are your car cannot be over 25 years old.

It must get 18 miles per gallon or less. You must have a clear title and owned and insured the vehicle for a minimum of one year.

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