Cash for Clunkers - Used Cars

Used cars are but one example of used goods that embody older environmentally unfriendly technology. Ideally, they should be deprived of a second life. But such capital punishment often creates hardship for people who must depend on such used goods for their livelihood.

Ford Motor will give a $1,000 incentive to buyers of new Fords, Lincolns and Mercurys who turn in pre-1990 clunkers that can still pass routine service checks under a program to fight air pollution. The program, limited to four counties in smoggy southern California, could be rolled out nationally (USA Today 09/16/98).

This looks like a win-win situation for all parties concerned. Ford can sell more cars. The air in Southern California will be cleaner¹. Owners of old cars don't have to bother selling their used cars.

But since Ford is going to scrap the old cars, at least three parties will be unhappy.

First, local auto repair and restoration professionals say such programs rob the market of valuable original replacement parts².

Second, people who cannot afford to buy new cars will have to pay more for the fewer left-over used cars that have not been siphoned off by Ford Motor. This will impose great hardship for poor Southern Californians who must have a car for basic transportation.

Third, independent contractors who pay owners of pre-1982 vehicles $500 to $600 in return for state smog credits for each vehicle scrapped are now deprived of a potential source of revenue. These contractors make their money selling those credits to businesses that use them to delay implementation of pollution cleanup programs (Los Angeles Times 09/16/1998).

Used cars are but one example of used goods that embody older technology that might be environmentally unfriendly. Ideally, they should be deprived of a second life. But such capital punishment often creates hardship for people who must depend on used goods for their livelihood.