One of the biggest opponents to the proposed Cash for Clunkers legislation has been the aftermarket industry. Under the bill, thousands of old and inefficient vehicles would be retired in favor of new cars and trucks that burn less fuel. While nearly everyone recognizes the potential benefits of legislation that would stimulate car sales and help to reduce our dependence on foreign oil, the fear is the program could have unintended repercussions.
Aftermarket organizations like SEMA have argued that if those aging vehicles are cut up for salvage, our country’s network of repair shops and aftermarket replacement part manufacturers would feel a pinch. An article in Reuters has taken the time to evaluate the argument. Evidently, there’s little to worry about for repair shops or aftermarket manufacturers due to the limited scope of Cash for Clunkers. The bill is only slated to pull around 1 million older vehicles from the road. Given the fact there are around 250 million registered cars and trucks in America, there’s no real shortage of older vehicles to keep running.
In fact, shops like Midas and auto parts stores like Pep Boys and Advanced have actually seen an increase in business due to widespread dealership closings – thereby offsetting any negative effects Cash for Clunkers could have on the industry. With the Senate closer than ever to voting on a unified bill, we may have the chance to see just who’s right. [Source: Reuters]
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