Cash for Clunkers, Bad News for Repair Shops: "The Gov.t Is Using My Own Money to Hurt My Business"

Fairfax Times -- "Cash for Clunkers" is bad news for Bill Wiygul, whose family owns several automotive repair shops in northern Virginia. Starting with one repair shop in Alexandria in 1976, the family now runs four automotive centers, two in Alexandria and one each in Reston and Herndon.

Shortly before the CARS program was initiated, Wiygul’s family purchased some property next to its Herndon location and planned to expand that location. Business was booming, in part because of an economy that forced many consumers to hold on to their older vehicles and keep them up in lieu of spending much-needed money on newer models.

“We put $1 million into that location,” Wiygul said of his Herndon site. “And now the federal government is subsidizing my competition. It is the most infuriating thing I have seen in 30 years of business.”

Wiygul said that among his four locations, he has lost at least 20 customers, including eight in Reston. “They are telling me they are going with the federal program,” he said of his disappearing clientele.

Wiygul said he does not blame consumers for joining the federal gravy train, he just wishes his tax dollars were not being used to help them do it. “,” he said. “And the thing that really gets me is that they are clearly favoring one segment of the auto industry over another. And of course it is the segment that they have a vested financial interest in.”

As part of the federal bailout plan, the U.S. government has invested about $65 billion and currently owns approximately 61% of General Motors and about 10% of Chrysler. “It is a very slippery slope,” Wiygul said.

Others in the auto repair business are also feeling the pain. Roy Page, who owns Advanced Auto Tech in Newington, said his business has dropped off 25% since the inception of the “cash for clunkers” program. “The older cars that we used to see are just no longer there,” he said. “Customers are telling us they are going with the program.”

Wiygul says that because of the program, potentially viable cars are also being taken off the market, limiting the affordable options that those in the market for a used vehicle can choose from. “This thing will have consequences that no one has thought of yet,” he said.

“For example, newer cars have hidden costs to consider, such as higher insurance, more expensive tires, and car payments that will still need to be paid long after the program is a memory.”

HT: First Trust Portfolios

Originally posted at Carpe Diem.