The cash for clunkers program requires dealers to destroy the engines. The government is advising car dealers to replace a trade-in’s engine oil with a sodium silicate solution and then run the engine until it is ruined before sending it to a recycler. The engine and drive train are where recyclers generate a good deal of their profit.
The reduction of affordable cars is expected to raise the price of parts for those cars and trucks. Some recyclers are now stockpiling parts for those cars in anticipation of higher prices later.