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‘Clunkers’ dealers instructed to kill engines

Auto dealers in the federal “cash-for-clunkers’’ program must disable trade-in cars in order to keep them from being resold. Auto dealers in the federal “cash-for-clunkers’’ program must disable trade-in cars in order to keep them from being resold. (Lynne Sladky/Associated Press)
By John Hughes
Bloomberg News / July 25, 2009

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WASHINGTON - Dealers in the US “cash-for-clunkers’’ program are being forced to disable trade-in vehicles with a chemical under new rules to prevent those who take the government subsidies from reselling the cars.

Dealers must replace the oil in the “clunker’’ with two quarts of sodium silicate solution and run the engine for up to seven minutes, permanently disabling it, according to rules released yesterday by the National Highway Traffic Safety Administration.

“Substantial opportunity exists for fraudulent diversion of the trade-in vehicle, largely because its still-functioning engine makes it attractive to return the vehicle to the road rather than relegate it to the scrap yard,’’ the NHTSA said.

The government is trying to help jump-start slumping auto sales through the program, giving consumers new vehicle credits of as much as $4,500 for turning in older cars. Sales of cars and light trucks in 2008 totaled 13.2 million, after averaging more than 16 million a year during this decade. Federal inspectors will review dealer records and vehicles for violators of the rules, who would face a $15,000 fine per infraction.

NHTSA officials said in the rules that they “understand’’ vehicles in Germany’s “clunkers’’ program have been resold rather than scrapped after certifications that the vehicles were disposed.

Sodium silicate is a substance found in dishwasher detergent and used to seal exhaust leaks in repair shops, according to the rules. The agency said it doesn’t believe use of the product will present a hazard to dealerships, scrap-yard workers, or the environment.