AAIA Predicts Consumer Backlash on “Cash for Clunkers”

BETHESDA, MD — July 27, 2009 — As new car dealerships ramp up advertising to attract consumers to the showroom using “Cash for Clunkers” as an incentive, the Automotive Aftermarket Industry Association (AAIA) anticipates a consumer backlash once reality replaces the hype.

“It wouldn’t surprise me if there is a consumer backlash once car owners realize that ‘Cash for Clunkers’ is nothing more than a clever slogan for a program to spend $1 billion of our tax dollars to fund a government subsidized vehicle trade-in to help new car dealers sell cars,” said Kathleen Schmatz, AAIA president and CEO. “Consumers will soon learn that they are simply trading in their vehicle and will still have to jump through all of the hoops to qualify for and purchase a new vehicle.”

The much heralded fuel efficiency and environmental benefits of purchasing a new vehicle could easily be achieved through better maintenance of an existing vehicle or trading up to a newer used vehicle, according to AAIA. Any savings from improved miles per gallon will be lost from the costs involved in destroying and disposing of the “clunkers.”

AAIA has strongly opposed “Cash for Clunkers” that prematurely destroys vehicles and their valuable parts and components. “Destroying vehicles with many more years of life denies consumers more affordable used vehicles and pulls vehicles from the aftermarket supply chain,” said Schmatz.

The Consumer Allowance Rebate System, the official name for “Cash for Clunkers” offers vouchers up to $4,500 to new car dealerships for consumers who trade-in their vehicle for a new, more fuel-efficient vehicle.

About AAIA
AAIA is a Bethesda, Md.-based association whose more than 23,000 member and affiliates manufacture, distribute and sell motor vehicle parts, accessories, service, tool, equipment, materials and supplies. Through its membership, AAIA represents more than 100,000 repair shops, parts stores and distribution outlets.

“Cash for Clunkers” is an Environmental Clunker
“Clunker” of a Bill Would Increase Pollution, Overload Landfills

BETHESDA, MD — May 20, 2009 — As “Cash for Clunkers” legislation moves closer to becoming law, the unintended negative consequences of this radical bill should be of concern to all Americans. The legislation, which in theory is supposed to be environmentally-friendly, would actually increase the amount of pollution generated for years to come.

“‘Cash for Clunkers’ is touted as protecting the environment by taking older vehicles off the road and replacing them with new, more fuel efficient vehicles. The reality is that these scrapped vehicles will be heading to landfills. It’s ironic that a proposal designed to reduce pollution will actually further damage the environment,” said Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association (AAIA). “While the true intention of this legislation is not to protect the environment but to financially stimulate the automobile industry in the short term, the hidden costs of this bill could cause environmental havoc indefinitely.”

The “Cash for Clunkers” amendment, included as part of the American Clean Energy and Security Act of 2009 (HR 2454), states that “For each eligible trade-in vehicle, the title of which is transferred to a dealer under the Program, the dealer shall certify to the Secretary, in such a manner as the Secretary shall prescribe by rule, that the vehicle, including the engine and drive train – i) will be crushed or shredded within such period and in such manner as the Secretary prescribes, or will be transferred to an entity that will ensure that the vehicle will be crushed or shredded within such period and in such manner as the Secretary prescribes; and ii) has not been, and will not be, sold, leased, exchanged or otherwise disposed of for use as an automobile in the United States or in any other country, or has been or will be transferred, in such a manner as the Secretary prescribes, to an entity that will ensure that the vehicle has not been, and will not be, sold, leased, exchanged or otherwise disposed of for use as an automobile in the United States or in any other country.”

“Cash for Clunkers is loaded with so many potholes that the American people will be paying a steep bill both economically and environmentally for a long time,” continued Lowe. “In addition to the wasteful nature of destroying perfectly good vehicles, a tremendous amount of energy and resources will be exhausted to build new vehicles to replace the scrapped ones. Providing incentives for motorists to have their current vehicles maintained for fuel efficiency would be a much better use of federal money that would truly benefit the environment.”

Engine Repower Council Opposes “Cash for Clunkers” Program

BETHESDA, MD — May 19, 2009 — The Engine Repower Council strongly opposes the federal “Cash for Clunkers” program that is part of the current economic stimulus package being considered by Congress. 

The Cash for Clunkers program would earmark federal funds for car owners to trade-in their older vehicles in exchange for vouchers to be used to obtain newer, more fuel efficient vehicles. These programs are of concern to the vehicle aftermarket since vehicles are scrapped that could be more cost effectively repaired, increasing the country's carbon footprint and reducing the availability of parts for rebuilders.

Congress has considered Cash for Clunker proposals in the past and has decided against them in every case. In fact, states are prohibited from using federal funding for state-run Cash for Clunkers programs under the Congestion Mitigation and Air Quality Improvement Program (CMAQ). There have been numerous attempts to lift this prohibition, however once lawmakers realize that Cash for Clunkers programs focus only on a vehicle's age and not its emission levels, they understand that these programs are not cost-effective and do not positively impact air quality or fuel economy. Therefore, time after time, the prohibition has remained in tact.

“Many states have attempted to implement this type of vehicle retirement program in the past, but have abandoned the effort because they simply don't work,” said Steve Rich, chairman of the Engine Repower Council. “While the programs have a certain appeal to politicians and are sold on the fact that they will get older vehicles off the road, the fact is that these programs reduce the availability of affordable transportation for drivers who, by taking such steps as engine repowering, can keep a vehicle in safe, efficient working order rather taking on the expense of a new vehicle.”
   
Interested parties can send an e-mail in opposition to the Cash for Clunkers program to the Speaker of the House, the Senate Majority Leader and their congressional representatives by visiting http://capwiz.com/aftermarket/home/ and clicking on “Take Action”

About the Engine Repower Council:

Professional engine rebuilding may offer a simpler,
lower cost way to cut greenhouse gas emissions

May 8, 2009 — Several plans are currently being debated in the public forum in an attempt to find a way to reduce greenhouse gas emissions. Most of these concepts have been debated for years—setting higher mileage standards, implementing advanced technologies, and passing “cash for clunkers” legislation. 
The head of one of the country's largest engine parts distribution groups says one simple, quicker and less costly idea is starting to gain more attention—professionally rebuilding worn-out and inefficient engines of the millions of older cars and trucks now on the road.

The president of Engine Parts Group, Inc., Thomas Hobson, says that the 25,000 independent shops that make up the U.S. engine rebuilding industry have been restoring auto power plants to original specs for decades and are now beginning to be recognized for their “green” contributions. “We hear a lot of talk about various ideas to reduce emissions, but policy makers and the public are starting to realize that the rebuilding of older engines may represent one of the fastest, cheapest and least wasteful ways to reduce automobile emissions.”

Hobson agrees that there is little argument that increasing new vehicle mileage (CAFE) standards would reduce fuel use—eventually. He points out that those standards have barely budged since the 1980s and there have been very few fuel saving technologies introduced in new vehicles over the last decade. Hobson says, “With more than 250-million vehicles on the road and people holding onto their cars longer, it would take years to have a real impact on the environment. By professionally rebuilding older engines, making them tighter and more efficient, we'd be able to make the vast fleet of older vehicles consume less fuel and emit less pollution very quickly.”

Hobson also suggests taking a closer look at the “cash for clunkers” programs that have been getting state and national consideration. “I think it's a good idea to address the problem of having so many polluting and inefficient vehicles on the road, but replacing them with new cars may not be the answer,” says Hobson. “I've seen reports that fully one-third of the total environmental damage caused by automobiles occurs before they are sold and driven. Car manufacturing consumes huge amounts of energy and raw materials, and generates a lot of waste. Hobson says that rebuilding the engines of vehicles to keep them on the road longer is an environmentally friendlier option compared to replacing them with new vehicles. A 2006 National Highway Transportation Safety Administration report shows that it would take 16 years for 90% of the vehicles currently on the road to be replaced. Restoring older engines to peak efficiency would reduce emissions faster, more cheaply and with almost no waste. The engine block can be reconditioned to like-new standards while worn out engine parts are replaced with new or better replacement parts.

The U.S. Department of Energy's fuel efficiency website shows that the simple act of keeping an engine properly tuned can save up to 165 gallons of gas per year. Checking spark plugs, oxygen sensors, air filters, hoses and belts are a few examples of maintenance that can result in potential savings of more than $400. Hobson says a complete professional engine rebuild would save that, and much more by restoring engine efficiency to original specs.

“Cash for Clunkers” Limits Access to Affordable Used Vehicles for
Low and Middle Income Families

BETHESDA, MD — April 15, 2009 — Cash for Clunkers would prematurely destroy vehicles and their valuable parts and components, denying more affordable used vehicles to millions of low and middle income families who cannot afford to purchase a new car even with a $3,000 to $5,000 government voucher. 

“For families that cannot afford the price of a new vehicle even with a government voucher, the Cash for Clunkers program would limit their access to affordable transportation, a must for most working Americans,” said Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association.  “Cash for Clunkers may sound good at first, but when you take a closer look, it is clear that the Cash for Clunkers proposal will negatively impact car owners, wasting billions of taxpayer dollars.”
Steven Levitt, a University of Chicago professor of economics and author of the best-seller Freakonomics, recently wrote about Cash for Clunkers on his New York Times blog: “It also seems to me that any effect on the demand for new cars would be extremely limited. People who drive clunkers are generally not in the market for new cars. Presumably their replacement car will be a used car. The increased demand for used cars will lead to higher prices for used cars, which will push some buyers towards a new car, but the likely impact on new cars would be small.”
Congress and states have considered Cash for Clunkers proposals in the past and in many cases have decided against them.  Many legislators have come to realize the unintended consequences of this program and that they are not a cost effective use of government money. 

Administration Cash for Clunkers Proposal Bad for
Consumers & Environment
Trade Association Cautions Against Creating Another Home Mortgage Debacle

BETHESDA, MD — March 30, 2009 — While the Automotive Aftermarket Industry Association (AAIA) supports efforts by the Obama administration to help stabilize U.S. based vehicle manufacturers, the association cautions that the “Cash for Clunkers” proposal will harm the environment, negatively impact car owners, waste billions of taxpayer dollars and hurt the hundreds of thousands of vehicle service and repair businesses in America.

AAIA strongly opposes the use of Cash for Clunkers programs, which threaten jobs in the independent aftermarket industry by removing repair opportunities for vehicles and raising the cost of used cars and parts. 

“It seems arrogant to destroy perfectly good vehicles with many more years of useful life just to entice consumers to purchase a car that they might not be able to afford,” said Kathleen Schmatz, AAIA president and CEO.  “This is hauntingly reminiscent to the home mortgage debacle when consumers purchased homes they could not afford.”

 

Opposition to ���Cash for Clunkers��� Programs to be Major Issue for 2009 Aftermarket Legislative Summit

BETHESDA, MD ��� February 19, 2009 ��� The Automotive Aftermarket Industry Association (AAIA) has added the ���Cash for Clunkers��� issue to the agenda for the Aftermarket Legislative Summit, scheduled for March 11-12, in Washington, D.C.

The ���Cash for Clunkers��� program that was removed from the Economic Stimulus package passed by Congress last week would have appropriated $16 billion in federal funds for car owners to trade in their sport utility vehicles in exchange for vouchers to be used for the purchase of a newer, more fuel-efficient vehicle. Although it was removed, congressional supporters have vowed to include the provision in another legislative vehicle, likely an energy bill that is slated for debate this spring. Sen. Tom Harkin (D-Iowa), who introduced S.AMDT.338 to the stimulus, and Sen. Dianne Feinstein (D-Calif.), who wrote the ���Accelerated Retirement of Inefficient Vehicles Act��� (S. 247), have been clear in their intent to obtain enactment of such a program in the 111th Congress.
���The aftermarket strongly opposes the use of ���Cash for Clunkers��� programs, which threaten jobs in our industry by removing repair opportunities for vehicles and raising the cost of used cars and parts,��� said Aaron Lowe, vice president, government affairs, AAIA. ���We plan to use the summit to educate legislators on the fact that while these programs look good on paper, they have never been shown to be a cost effective means to improve fuel economy, reduce emissions or spur new car sales.���

���Cash for Clunkers��� Amendment Withdrawn from Senate Stimulus Bill
Victory for Consumers and Small Business Owners

BETHESDA, MD ��� February 6, 2009 ��� The ���Cash for Clunkers��� amendment to the United States Senate stimulus package was withdrawn from the bill on Thursday. The Cash for Clunkers program would have earmarked federal funds for car owners to trade-in their sport utility vehicles in exchange for vouchers to be used to obtain newer, more fuel efficient vehicles.

���We are thrilled that this amendment was withdrawn from the stimulus package,��� said Kathleen Schmatz, president and CEO of the Automotive Aftermarket Industry Association (AAIA). ���This amendment was full of potholes from the beginning and once the Senators were informed of all the unintended harmful consequences that would have resulted from inclusion of this amendment in the bill, they made a very wise and informed decision to remove this amendment from the stimulus package.���
Congress and states have considered Cash for Clunkers proposals in the past and in many cases have decided against them. Many legislators have come to realize the unintended consequences of this program and that they are not a cost effective use of government money.

���I want to thank our AAIA staff and most importantly our membership for their hard work in getting out the word about the problems ���Cash for Clunkers��� would cause,��� continued Schmatz. ���Their letters, emails and phone calls opposing ���Cash for Clunkers��� were instrumental in getting this amendment removed. The elimination of this amendment is a great victory for vehicle owners as well as for every small business owner who is involved in the automotive industry.���

About AAIA
AAIA is a Bethesda, Md.-based association whose more than 23,000 member and affiliates manufacture, distribute and sell motor vehicle parts, accessories, service, tool, equipment, materials and supplies. Through its membership, AAIA represents more than 100,000 repair shops, parts stores and distribution outlets.

���Cash for Clunkers��� Program: A Wolf in Sheep���s Clothing
Plan to Scrap Older Vehicles Will Hurt Many Consumers

The Cash for Clunkers program being considered by Congress for inclusion in the economic stimulus package is really a wolf in sheep���s clothing, according Automotive Aftermarket Industry Association. The Cash for Clunkers program would earmark federal funds for car owners to trade-in their sport utility vehicles in exchange for vouchers to be used to obtain newer, more fuel efficient vehicles. On the surface the program may sound reasonable, but its consequences will create issues for those not fortunate enough to afford the cost of a new vehicle and would be a waste of taxpayer dollars.

���The Cash for Clunkers program has unintended consequences that are not currently being considered by Congress,��� said Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association. ���Those seeking a ���quick fix��� have failed to consider the impact of the program on lower and fixed income families as well as charities. By taking vehicles off the road that might be sold as used, the program will raise the price for all used vehicles, thus impacting those on limited income that cannot afford new vehicles. Further, since the parts on those vehicles that are scrapped could be sold as used or reconditioned, the program will cause an increase in repair prices for consumers.���

Congress and states have considered Cash for Clunkers proposals in the past and in many cases have decided against them. Many legislators have come to realize the unintended consequences of this program and that they are not a cost effective use of government money.

���Providing incentives for individuals to purchase fuel efficient vehicles or to have their current vehicle maintained would be a better use of federal money,��� continued Lowe. ���Cash for Clunkers programs might look good on paper, but in reality they are a bad idea and should be rejected by Congress.���

Interested parties can send an e-mail in opposition to the Cash for Clunkers program to the Speaker of the House, the Senate Majority Leader and their congressional representatives by clicking on the ���Take Action��� button below.