Scrap yards making 'tons' from CARS

August 1, 2009 5:40:27 PM PDT
It is a hectic weekend at car dealerships across the country one day after Congress decided to refuel the federal Cash for Clunkers program. A lot of those old clunkers are ending up in scrap yards.

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Aside from the economic benefits, a big aim of the program is to get gas-guzzling cars off the road.

Bob Julius is saying so long to his 1996 Ford Aerostar. He was prompted to part with his trusty mini-van when the government extended the "Cash for Clunkers" rebate program.

"I was going to wait until the end of summer to buy a new car and then this program came along, so let's do it now," car buyer Bob Julius told ABC7.

Julius' $4,500 rebate went toward the purchase of a 2009 Hyundai Accent which gets at least ten more miles per gallon than his old van did. It is one requirement of the federal CARS act.

At Concord's Future Ford/Hyundai, the CARS program has turned business on its head. On Friday, the dealership sold 20 new cars, most of them the result of a clunker trade-in.

"I don't think I've see more 200, 300,000-mile cars in my career in the car business. It's amazing. People hold onto their cars waiting for something special like this to come up," explained sales manager Derek Trammel.

The program requires dealerships to disable the engines and send the old gas-guzzling trade-ins to a scrap yard within six months. Pittsburg scrap yard owner Mike Fernandes expects to get hundreds of clunkers from local dealerships in the next few weeks.

"We'll smash the cars and take them into Schnitzer Steel Mill and get paid by the weight," he said. "We're paid by the ton. So, the more tonnage we get in, the better off we are. So, we appreciate the deal. It helps us out tremendously."

The program requires the trade-in cars be crushed. They cannot be dismantled and sold for parts. In fact, dealers must replace the oil in the clunkers with a chemical that disables the engine permanently, before they can even be sent to a scrap yard. The government has set up some very strict rules to ensure that the cars do not end up back on the road.

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