Published - August 22, 2009
Clunkers mean cash for local salvage yards
Local auto salvage yards are reporting an uptick in business as Panhandle residents turn in old vehicles for recycling as part of the federal Cash for Clunkers program.
The program gives qualifying car buyers $3,500 or $4,500 to trade in older, less fuel-efficient vehicles and purchase a new environmentally friendly car.
The old vehicles then are sent to an automobile recycling facility for processing.
"I've probably got 25 to 30 right now," said Jim Butler, co-owner of Butler's Auto Recycling on North Palafox Street. "I think, realistically, in the Pensacola area, about 450 to 500 cars is what we'll see."
Butler said he expects to transport more than 100 cars to his recycling facility this weekend.
The program has been overwhelmingly popular with consumers, who turned out in droves to trade in their old vehicles. When the program began in late July, it only took about a week to burn through its initial $1 billion budget. Two weeks ago, Congress approved an additional $2 billion for the program, but the Transportation Department announced Thursday that money also was almost gone, and the program ends Monday.
After the government announced the Cash for Clunkers program, Butler said he got in touch with most local car dealers and worked out a deal to dispose of cars they acquire through the program.
Butler said he pays the dealer the scrap value of the vehicle, which can range from $150 to $300, and transports it from the car lot to his facility for processing.
"Right now it's mostly a handshake deal with the dealers and myself," Butler said.
Crews at Butler's facility drain and recycle all of the fluids from the vehicle, remove components such as tires, body panels and air conditioning compressors for resale, and crush what remains to sell for scrap.
Program rules require that dealers disable the engine by draining the oil and replacing it with a fluid that seizes the engine - something Butler said reduces the value of salvaged cars. But he said it also streamlines the recycling process because workers don't have to take the time to pull the engine from the vehicle.
"It's a much faster process," he said.
Butler's Auto Recycling is one of four recycling operations in Pensacola that qualify to participate in the program. The others are Kiker's U-Pull It on West Fairfield Drive, Scrap Inc. on North Hollywood Avenue and Southern Recycling on South Myrick Street.
Southern Recycling officials declined to comment, citing corporate policy. The owners of Kiker's and Scrap Inc. could not be reached.
Butler said his salvage lot processes about 2,300 cars per year - mostly accident vehicles that were totaled by insurance companies.
He said he doesn't expect the clunker program to make a huge impact on his business, but he does think it will provide a nice boost.
Michael Whelan, sales manager at Bob Tyler Suzuki Toyota, said the dealership has about 100 vehicles on its lot that were traded in as part of the Cash for Clunkers program and are awaiting final approval to be transported to a salvage lot.
"We've got a whole garden of clunkers out here waiting to be salvaged," Whelan said.
Sandy Sanding, owner of several dealerships in the Pensacola area, said his lots also have about 100 vehicles awaiting salvage.
"We've sold more cars because of the clunker program than we anticipated," Sansing said. "It's been a great program."