Cash for Clunkers and the Salvage Yards

Today TaxMama reads about the Cash for Clunkers fallout. It’s so popular that all the money ran out in the blink of an eye – and Congress had to quickly appropriate new money. So, if you want your $3500 or $4500 rebate – get it fast! It seems that the salvage yards are concerned because all the traded-in cars are being crushed instead of going to salvage. That means the loss of valuable replacement parts for older cars still in service.

TaxMama answers Tax Questions

Well folks,
Sorry if I am confused, but…the dealers ARE supposed to turn the cars over to salvage yards. What am I missing?

Didn’t the dealers READ the actual, bill – or just the summary? The bill says:|/bss/111search.html|

Title XIII©(2)(B) is the Savings Provision. With respect to the crushing and disposal it says:

(B) SAVINGS PROVISION- Nothing in subparagraph (A) may be construed to preclude a person who is responsible for ensuring that the vehicle is crushed or shredded from—
(i) selling any parts of the disposed vehicle other than the engine block and drive train (unless with respect to the drive train, the transmission, drive shaft, or rear end are sold as separate parts); or

(ii) retaining the proceeds from such sale.

Why are dealers not turning the cars over to salvage yards.

Are they afraid that the cars will not be stripped and crushed by the deadline – and that they will be held responsible?

Perhaps the cars would be available to the salvage industry if only they could arrange to work quickly enough to harvest the largess…instead of leaving the vehicles in their yards until people need the parts (which happens to be a more efficient way to store the parts).

Congress should have taken that into consideration. Clearly, they were more concerned that the vehicles not be re-sold than about recycling them.
And remember, you can find answers to all kinds of questions about cash for clunkers and other tax issues, free. Where? Where else? At

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