Business & Economy

Dealers must destroy engines of Cash for Clunkers trade-ins

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The Cash for Clunkers program gets to keep running at least through Labor Day. The U.S. Senate has voted to pour in another $2 billion. When a cash-for-clunkers deal goes through, the customer rides off in a discounted new, more fuel-efficient car. But what does the dealership do with the clunker? KPCC’s Brian Watt explains.

Brian Watt: The program initially required dealers to destroy the clunker engine before applying for the cash. That involves pouring in a half gallon of a sodium silicate solution. Jerry Mitchell of Huntington Beach-based Jeran Products says he’s used to selling nuts and bolts to dealerships. Now they’re clamoring for the solution.

Jerry Mitchell: There’s a run on the stuff. And as fast as we get it in, it goes right out.

Watt: The federal government now allows dealers to wait to destroy the engine until after they receive the payment. Mary Miles is the Ontario office manager of the Pick-A-Part auto dismantler. It buys the junked clunkers for a couple hundred dollars. She says the rule-change caused a slight slow-down in calls from dealers.

Mary Miles: They’re holding on, waiting, making sure that they’re getting their money from the government. ‘Cause if they don’t, they can take that vehicle and they can use it as a trade in, and they can sell it for a couple thousand dollars as a used vehicle.

Watt: Despite the hassles, Mary Miles and Jerry Mitchell agree that cash for clunkers is helping dealerships and the aftermarket parts industry.