ARA SUCCESSFUL IN EFFORTS TO SECURE ADDITIONALPROCESSING TIME FOR AUTOMOTIVE RECYCLERS
The National Highway and Traffic Safety Administration (NHTSA) has issued its final ruling which allows automotive recyclers an additional 90 days, for a total of 270 days, to crush or shred vehicles traded in under the Consumer Assistance to Recycle and Save (CARS) program.  The final rule amends regulations implementing the CARS program – also known as Cash for Clunkers – initially published on July 29, 2009.

ARA Executive Vice President Michael E. Wilson states, “The additional processing time allows the “Cash for Clunkers” program stimulus effects to continue.  By providing additional access to economical “green” recycled automotive parts harvested from vehicles traded in under the program, consumers will benefit along with the businesses that sell those parts.”  Wilson adds, “We are appreciative of the Agency’s understanding and acknowledgement of the many consumer benefits that the professional automotive recycling industry provides.”

NHTSA initiated an official agency proposed rulemaking on November 27, 2009, lasting 20 days, to allow for public comments.  The Automotive Recyclers Association (ARA) and our affiliated chapters along with many members offered overwhelming support for extension.  NHTSA’s actions are a direct response to the concerted effort of the automotive recycling industry to address the many challenges encountered by the industry by the tripling of the original program.   

NHTSA final rule states that “the additional time will allow the public to benefit from the availability of lower cost used vehicle parts from vehicles traded in under the CARS program and will provide disposal facilities with an opportunity to derive more revenue from those vehicles prior to crushing or shredding.”

ARA would like to thank those members helped advocate for the extension.  Your commitment to the industry is greatly appreciated.

For a complete copy of the NHTSA final rule, click here.

While no one knows for certain how many cars will be sold in the years ahead, scrappage rates are easier to project. If we assume an auto life expectancy of 15 years, scrappage rates will lag new sales by 15 years. This means that the cars sold in the earliest of the elevated sales years of 15-17 million vehicles from 1994 through 2007 are just now reaching retirement age. Even though newer cars are more durable than earlier models, and may thus stay on the road somewhat longer on average, scrappage rates seem likely to exceed new car sales through at least 2020. Given a decline of 1-2 percent a year in the fleet from 2009 through 2020, the U.S. fleet could easily shrink 10 percent (25 million) by 2020.

Many independent mechanics do not have the thousands of dollars to purchase the online manuals and specialized tools needed to fix the computer-controlled machines.  Access to repair information is at the heart of a debate over a congressional bill called the Right to Repair Act.  Supporters of the proposal say car-makers are trying to monopolize the parts and repair industry by only sharing crucial tools and data with their dealership shops.  The bill, which has been sent to the House Committee on Energy and Commerce, would require car-makers to provide all information to diagnose and service vehicles.

Car-makers purport that they spend millions in research and development and aren’t willing to give away their intellectual property.  The fear from the manufacturers is that they fear the parts and repair industry may gain patent information to make its own parts and sell them for less.  However, vehicles these days come equipped with multiple computers controlling almost all aspects of a vehicle.  To diagnose a problem with your vehicle, it often takes costly diagnostic or other analysis, which independent repair shops are currently unable to access the specific technology.