Major automotive aftermarket associations, including the Auto Care Association, Tire Industry Association and Service Station Dealers of American and Allied Trades, the Automotive Oil Change Association and the Automotive Service Association sent a letter to congressional leaders in opposition of a new “Cash for Clunkers” type program being included in the next COVID-19 stimulus legislation.
The members of these organizations represent automotive service and repair professionals, tire dealers, distributors and manufacturers that depend primarily on post-warranty vehicles for revenue. In 2009, during the Obama Administration, the Consumer Assistance Recycles and Save (CARS) program was implemented as a response to the 2008 recession. The goals of the program were to reinvigorate the automotive industry, improve fuel efficiency and cut carbon dioxide emissions. However, evidence suggests the program functioned as a boon to automakers alone. The Government Accountability Office (GAO) and Brookings Institution also raised questions about whether the program was successful in stimulating the economy.
Their letter states:
What we do know is that this $3 billion program removed approximately 700,000 vehicles from independent automotive repair shops. These vehicles were destroyed by the federal government after taxpayer dollars were spent up to $4,500 per vehicle. The program was beneficial to auto manufacturers rather than acting as a stimulus to the entire automotive industry.
“As a result of the economic devastation resulting from the COVID-19 crisis, Congress should focus its efforts on helping the country and, more specifically, the entire transportation sector get back on its feet,” said Bill Hanvey, president and CEO of the Auto Care Association. “While the Cash for Clunkers program might benefit the bottom line of the vehicle manufacturers, it fails to deliver effective aid to those that need it most: the small- and medium-sized businesses that repair and maintain vehicles and the Americans who own them.”
“What we need now are forward-thinking, practical solutions that benefit Americans across the board, not questionable old programs proven to benefit only a select few businesses,” said Kristy Babb, executive director of the Automotive Oil Change Association.
“The Cash for Clunkers program had confused results as far as stimulating the economy and improving air quality,” said Ray Fisher, president and executive director of the Automotive Service Association. “What we do know is that the program impacted employment and harmed the bottom line of numerous small business independent automotive repair facilities and their families across the U.S. ASA opposed the implementation of the Clunkers program in 2009, and ASA opposes the program as part of any COVID-19 stimulus program in 2020.”
“Rather than focus on removing older, post-warranty vehicles from the roads indiscriminately through another Cars for Clunkers program, Congress should look at enhancing motor vehicle inspection programs in all 50 states,” said Roy Littlefield, CEO of the Tire Industry Association. “This would remove unsafe vehicles from the nation’s roadways, while maintaining safe older vehicles as a customer base for independent repair shops.”