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Scrappage Update from SEMA

Editor’s Note: As Congress is considering various scrappage proposals, this “Scrappage Update” section has been included in Driving Force to brief SAN members on developments surrounding these harmful and shortsighted measures. Critical to this effort are SAN members rallying their fellow hobbyists against these programs. Here is a letter that was sent by long-time SAN member Tom Cox to enthusiasts in his area.

Fellow Hobbyists,

Some of you are no doubt aware that Congress is considering funding another ill-advised “Cash for Clunkers” program. In the past, such scrappage programs have been largely funded and administered at the state level. Unfortunately, Congress is poised to ram a stimulus package through within 30 days of the inauguration. Many congressional members, at the urging of car dealers and manufacturers, are petitioning the Obama transition team to support a federal scrappage program funded with billions of U.S. taxpayer dollars as part of the stimulus package.

The belief is that low-income families will trade their clunker for $1,500 or $2,000 from Uncle Sam, and then rush to buy a new car. In addition, it is believed that buying and scrapping these older cars will clean the air. Both assumptions are heavily flawed.

Many of the cars traded in under this plan would have been driven sparingly, if at all, and many would likely come from junkyards and junk dealers. Additionally, these older vehicles represent a minimal part of the pollution problem due to their small numbers and minimal annual mileage. This is another feel-good proposition that will not address the true causes of air pollution, but will only serve to make bureaucrats feel useful.

Low-income families will never be able to buy a new car simply because someone gave them $1,500 or $2,000. New cars cost far more than that; $1,500 or $2,000 will not cover taxes, DMV fees and the higher insurance fees required on most new vehicles. Not only will these lower-income folks not be able to access a new car, but they will find the cost of a used one in their price range is harder to find, as all the inexpensive cars will be scrapped under this plan. Accordingly, they will be limited to working in areas serviced only by public transportation, which will trap many in deteriorating metropolitan areas without access to better jobs. In addition to the motorists affected, auto body shops, general repair shops, auto parts companies and many others in our backyard will be affected negatively through the scrapping of these cars.

Many of you may wonder how this will affect the old-car hobby. It will impact us immediately in some ways and eventually in others. There will be an immediate reduction in older parts available for restoration and project cars. Old cars will be looked upon as detrimental to the environment and will be labeled as such. Most government programs and initiatives such as this start out as “voluntary.” Eventually, they then become permanent, and we may all be compelled to rid ourselves of older cars or prevented from driving them. In addition, bodyshops and auto-service-related businesses will dwindle in number, driving up repair costs. Once old cars are labeled as gross polluters due to this legislation, we will be forced into emissions testing or even paying carbon taxes on our cars. There is even the possibility of federal auto registrations to keep track of these older cars. Trust me, you and your hobby will be disproportionately affected by this legislation.

Instead of Cash for Clunkers, if politicians really want to help in these times of crisis while cleaning the air, they should support the following recommendations offered by our friends at SEMA:

  • Allow an above-the-line tax deduction for interest, sales and excise taxes associated with the purchase of a new car or provide a tax credit/voucher for everyone towards the purchase of a new or used car, more efficient car, etc.
  • Provide tax credits to help repair or maintain an older vehicle since this employs the people who make the parts, sell them or install them. This will offer the owner added performance, drivability and fuel mileage and significantly reduce pollution since maintenance, not age, is the greatest factor affecting air pollution from vehicles.

Act now! Please respond immediately to the Action Alerts sent by the SEMA Action Network and available at www.semasan.com. On behalf of your fellow hobbyists, I thank you in advance for your attention to this matter.

Sincerely,

Tom Cox
Vice President Membership AACA
President Southwest Virginia Car Council
Past President Virginia Museum of Transportation
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