Nearly 700,000 vehicles were traded in as part of the government’s $3 billion Cash for Clunkers program, but in the surrounding area, many of those clunkers are still sitting at dealerships, according to Clint Jacob, from Boutte-based Jake’s Towing.
Jake’s Towing is one of the largest vehicle-crushing companies in Louisiana and is one of only a few in the state that is federally certified to destroy clunkers.
However, Jake’s has yet to demolish a single vehicle.
“It’s strange,” Jacob said. “The dealerships are supposed to have them crushed to keep those vehicles off the road, but it seems like that’s not being done.”
In fact, Jake’s representatives have visited 17 car and truck dealerships on both the East and West Bank and have sent e-mails and made phone calls to even more. The company offered to pick the clunker vehicles up, pay the dealership for the vehicle and send a before and after picture to show that the vehicles were disposed of properly and that parts weren’t removed.
Jacob said they haven’t heard anything positive back from any of the dealerships.
“I don’t know what’s going on and it seems like a lot of dealerships don’t know what’s going on either,” Jacob said. “I have a feeling that those vehicles are going to be sold or put up for auction, which is not supposed to happen.
“If it does, I would think a lot of people will be going to jail.”
However, Jacob has heard that some dealerships are keeping the vehicles on their lots until the government reimburses them, which was evidently a big concern before the program started.
When purchasing a vehicle through the program, buyers had to sign an agreement with the dealerships that said that if the government didn’t pay the dealers the $4,500, the buyer would be liable for that amount.
“I think that’s crazy,” Jacob said. “Why even start the program if the dealerships weren’t guaranteed that they would get that money back?”
And money is something that’s not guaranteed to Jake’s either, even if clunkers start rolling in.
The price of scrap steel has dropped from about $220 a ton to nearly $120 a ton because auto makers and other industries are making less in a slumping economy. With so many vehicles supposedly on their way to being destroyed, that number could drop even further.
“We would make money from dismantling the parts – such as fenders, hoods and the glass – but that price could be driven down as well because if those clunkers do finally get demolished, there would be so many parts out there,” Jacob said. “This program cost too much money, got done too quick and there are not enough answers.”
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