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Do Salvage Yards Benefit From Cash For Clunkers?

Do Salvage Yards Benefit From Cash For Clunkers?CBS

Cash for clunkers has become a crushing reality for salvage yards. But are they benefiting from the popular government program?

John from Peabody declared his Curiosity to WBZ writing:

"Are the salvage yards making a killing?"

Tom Andrade of Everett's Auto Parts in Brockton says he'll receive more than 1500 cars through the government's cash for clunkers program.

"In the short term the program has been generous. It's increased our vehicle flow," Andrade says.

But long term he says his business may take a beating because customers are buying new vehicles.

"They're servicing them under their dealer warrantee and not purchasing new or used parts from somebody like our company," Andrade said.

Operators at Everett's Auto Parts are working overtime to deal with the high volume of cars. Each "cash for clunker" must be destroyed within 180 days. Some of parts can be spared but the engine must be destroyed, which is hurting the salvage yard industry.

"Under the program the engine has to be disabled and block is not allowed to be resold, so that takes the piece of the vehicle right off the table and that is our number part type as an industry," Andrade says.

An engine can cost him anywhere from $500 to $2000.

So while they are crushing and mangling cars now, Andrade says he does not think the program will be beneficial long term.

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