The Specialty Equipment Market Association applauds efforts to help consumers, automakers and dealerships with a program to stimulate new car sales. We support the concept of government-issued vouchers toward the purchase of fuel-efficient new vehicles and allowing consumers to deduct the car interest payments on their taxes.
However, SEMA continues to oppose tying these vouchers to vehicle scrappage programs, known as "cash for clunkers." The programs accelerate the demise of older vehicles, which are then typically crushed into blocks of sheet metal. Scrappage programs focus on a car's age rather than how much it is driven or its actual emissions. SEMA has consistently warned against wasting taxpayer dollars on a program that may produce an artificial spike in sales, but does not reduce emissions or increase fuel efficiency.
Automakers and dealers need to sell cars in order to survive, but potential buyers have hit the brakes in these tough economic times. Scrappage programs actually would deny vouchers to the majority of people who may want to buy a new car but don't have an eligible older car to trade. Instead, these programs will be misused by those who own two or three older cars and seek to take advantage of the taxpayer give-away. Many of these cars aren't frequently driven, if at all, so destroying them will not clean the nation's air or make us less dependent on foreign oil.
While supporters tout a similar German program as evidence of success, the European Federation for Transport and the Environment, (the pan-European federation of environmental groups), has urged Germany and other countries to abandon scrappage subsidies because they do more environmental harm than good by artificially accelerating the car life cycle.
Scrappage programs hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country. This industry provides thousands of American jobs and generates millions of dollars in local, state and federal tax revenues. We encourage the President to help the entire auto industry with programs that focus the incentive where it counts - on the purchase of new vehicles and not destroying older cars.