Auto parts dealers and scrap yards are required to destroy the cars turned in under the program. They have to 'freeze' the engine and crush the cars - many of which are in pretty good shape, as this video from WSPD shows:
Clunkers Program Not Good for All, Junk Dealers Say
Scrap Yards Call it a Waste of Money
By WSPD's Aaron Brilbeck
While the government and local car dealers are hailing the "Cash for Clunkers" program as a success--some local scrap-yards are calling it a huge waste of money. At Nationwide Autoparts in South Toledo, owner Zyad Humos stands next to a Mercury S-U-V that looks practically brand new, and shakes his head in disgust as he's about to crush a 1999 Lincoln that doesn't look like a clunker.
The program requires Humos to destroy the vehicles, but he says if he sold the Lincoln for parts, he could easily get $6,000 for it. And, he says, in the past week he's crushed about two dozen cars in similar shape.
So the government borrows billions to give $4,500 to dealers for certain cars to be turned in and destroyed, and the aftermarket - used car dealers and auto parts suppliers - is losing money ... more money than the rebate.
So if the overall long-term loss of money from the market is much greater than the temporary rebate, how does this 'stimulate' the economy?
And idiots in Washington think this is such a good a idea that they want to put another $2 billion toward it? Insanity!