The recently concluded Car Allowable Rebate Program (or Cash for Clunkers) has gotten a lot of press lately. It subsidized, up to $4500, purchase of new car, provided it met rather minimal fuel economy standards.
Less well known is California’s variation on this program, called CAP (Consumer Assistance Program). Their website slogan, Drive Healthy for California, is shown over a picture of blobs of oil floating in a blue sky.
Recently, I had opportunity to test out the CAP program when my 13-year-old luxury sedan failed its smog test.
The smog technician identified the problem as a malfunctioning EGR valve. The EGR system recirculates exhaust gas into the engine to burn off pollutants. If the valve malfunctions, the exhaust gas doesn’t get burned off properly.
“You’re in luck,” the tech told me. He explained that because the car was so old, it counted as a “gross polluter”. That means, the State of California, in the midst of its one of the worst budget crises in history, would pay to have my car fixed. Surely, that can’t be, right? I mean, aren’t there income requirements? Nope.
One catch is that California will only pay for repairs done at a shop participating in the CAP program. My regular mechanic, like a lot of other repair shops, was not on the official list.
So I bring the car to a “CAP” mechanic in my neighborhood — a guy I had never used before. Right away, when describing the problem to him, I kept getting this sense that he was real slippery. But what the heck, the State was paying for it — and he was on their officially approved list, so what did I have to lose?
The following day, he tells me it is all fixed and the smog certificate was already filed with the DMV. And how much did I owe? “Nothing,” he says, because the repair bill came within the $500 allowed under CAP.
I examine the invoice and (surprise, surprise) the bill was exactly $500. Gee, who would have guessed? I wonder how many of these State-subsidized repair bills come out to be exactly this amount?
Even more ominous is that the bill indicates he merely cleaned out the valve. Based on what the smog tech had showed me, I was pretty certain that the problem was a malfunctioning valve. Cleaning an EGR valve is definitely not a $500 job.
A few weeks later, the check engine light pops on. I scan the code and, sure enough, it is an EGR malfunction code. I bring the car to my regular mechanic, and told him the story about how this other guy claimed he cleaned out the EGR valve.
My mechanic laughs, “Cleaned out your wallet is more like it,” he says.
Well, the State’s wallet, actually.
So how much would it cost to replace the EGR valve? “Oh, about $500,” he says.
Clearly there are huge loopholes in the CAP program. Anytime the government subsidizes an economic activity, people will figure out how to manipulate it. That is not very difficult when the mechanic getting paid by the State to “fix” a smog failure also is the one to send in the DMV Certificate.