Cash For Clunkers” Doesn’t Utilize Junkyard Efficiency
by Andrea Gregovich 08/02/2009
My father owned and operated a junkyard in Tucson for a number of years, and I learned a lot about the auto recycling industry helping around the office and as a delivery driver. So as a junkyard enthusiast, the “Cash For Clunkers” program naturally caught my interest lately. Though it looks to be the product of good intentions, I don’t think the legislation understands that junkyards already comprise an efficient, well developed recycling system for salvaging vehicles, with a beneficial result for the environment overall. I’m skeptical that quickly scrapping so many government-defined “clunkers” and replacing them with new, fuel-efficient models will have a substantial environmental benefit, because the plan has the potential to waste many useful materials in these cars.
A junkyard may appear to be little more than a landfill for old cars if you’re just driving by, but in fact, to succeed, it must function as a highly efficient recycling operation. Junkyards sell parts to other junkyards, mechanics, and directly to consumers, and attempt to make as much of a profit as possible from each part on every car in their inventories.
There is also a network of scavengers who travel around to junkyards gathering large core items, like alternators and starters, and a number of precious metals in small amounts that most don’t even recognize as in our cars. (Catalytic converters, for example, contain platinum and palladium, which are quite valuable when salvaged.) But a car needs to sit on the lot for a considerable period of time for this recycling process to work itself through. Parts from a car are usually sold one at a time over a period of months or even years; scavengers work on their own schedules. A scavenger may only come by a junkyard a few times a year to core out a particular metal or gather the useful components. Meanwhile, the junkyard needs to be selling parts off the car for it to be financially worth keeping in the inventory. A car is only sent off to be crushed for scrap metal when it no longer retains enough value to justify filling the space on the lot.
If the Cash For Clunkers program is successful, it has the potential to throw a wrench into the system. The program’s rules require that the engine of a trade-in car be destroyed with an injection of sodium silicate so that the car won’t be resold and put back on the road. The rules seem to encourage the immediate crushing and shredding of the trade-in cars, but should they remain on junkyard lots, their inventory value would take an immediate hit with a non-functioning engine (the most valuable part of the car). To what degree the value decreases depends on the extent of the engine damage, the demand for the particular engine, and the age of the engine.
A genuine old clunker would be likely to have a well used, and therefore less valuable engine, but then, the “clunker” program nickname (its official title is the “Car Allowance Rebate System”) is something of a misnomer. To be eligible for the program, cars must fall into certain categories of fuel inefficiency, be less than 25 years old, and worth less than $4500. This includes a number of models from the nineties. A working engine in many of the models targeted for the program is likely to have fewer miles on it, and therefore a higher inventory value, than a more traditionally defined clunker.
But engine issues aside, if the program succeeds in taking a large number of particular models off the road, it could have an even more drastic effect on the junkyard value of those models, simply by lowering the demand for their parts. If there are only a few of a given model on the road, few consumers will buy parts for them from junkyards. Many junkyards are picky about which models they purchase for inventory, and won’t even bother with a model if there is little or no demand for its parts. So if Cash For Clunkers leaves some car models without junkyard value, those models would start going directly to the crusher, taking many of their valuable components with them. The scrap metal from crushed cars is used to make things like rebar and fence posts, so it isn’t as though the scrap winds up in the landfill. But it’s still a waste for precious metals and other valuable components to be crushed down with the low-end materials for low-end product.
And even beyond the metals, something mundane like a plastic glove box has its own environmental impact. The overall junkyard process, where cars without “street” value become parts donors for cars still in use, prevents a great deal of after-market manufacturing of glove boxes and all the other parts that wear out or get damaged in cars on the road. If entire models are abruptly taken off the road, devalued at the junkyard, and crushed, it means that many new glove boxes must be manufactured – both for the new cars replacing the model, and for any other models and even makes still on the road for which that model of glove box, or stereo, or steering column fits (and many parts are surprisingly versatile this way). That could mean a boost in manufacturing, sure – but it also means an environmental impact that offsets some of the gains from the new fuel-efficient car that replaces the clunker.
Cash For Clunkers is scheduled to end November 1, so it’s unlikely to have a long-term effect on the auto recycling industry beyond burdening it with a glut of devalued inventory. But so far the program is popular, and may be expanded or set a precedent for future programs. If this happens it could take a toll on the junkyards and their ability to recycle effectively. If there are suddenly millions of brand new car models on the road, there would be a period of hardship for the auto recycling industry, as the new cars would be running well, with any repairs done mostly under warranty at the dealerships with new parts. This whole scenario could also, by extension, tax the junkyard consumer base of low income, self-sufficient individuals whose cars are older, skillfully maintained, and perhaps most importantly, paid off.
It’s beyond my pay rate to comprehensively evaluate the net difference in environmental impact between manufacturing and selling new, fuel-efficient cars for these quick “clunker” trade-ins and letting the older models stay on the road. But a legitimate evaluation would clearly involve more complex factors than a simple comparison of fuel efficiencies. Yet it’s clear that the program doesn’t appear to insert any innovative solutions into an already dynamic and effective recycling system. Even if it has some positive outcomes, it doesn’t look like Cash For Clunkers will utilize the industry’s full potential for environmental benefit.
Perhaps its primary motive lies elsewhere, in its attempt to jump-start the auto industry with a “green” marketing gimmick. But in the process we may have reaped some unintended damage on a sometimes unsightly but remarkably environmentally resourceful industry.