If you've ever wondered what to do with an old vehicle, you may have come across companies that promise "we buy junk cars." These outfits give you instant cash for that clunker taking up space in the garage.
Some people are unfamiliar with how these services work, what they offer, and whether or not using the service is a good deal. We'll shed some light on this unusual business model, its benefits, and the risks to be aware of.
How Does a "We Buy Junk Cars" Business Work?
The car junking market is enormous. It is part of a larger automotive recycling industry that’s worth more than $32 billion in annual sales, employs more than 140,000 people, and operates in approximately 9,000 locations across the country.
It's such a large enterprise because most of the automobiles in the United States are eventually recycled, which means that the more cars on the road, the more recycling capacity the country requires.
The junk cars model is simple, it's a way of getting rid of an old clunker as quick and painless as possible. These businesses typically target car owners who have vehicles that are too old, unusable, broken down, taking up space in the driveway, or are otherwise difficult to sell to a private buyer.
Most of the time, they are older cars, but even newer cars are sometimes junked because it is the quickest and easiest option.
Step 1: Make an Inquiry
The first step is for the customer to contact the car junking company. Many operations will have a website to enter the car's make, model, and year. Supply the information, and you'll receive a preliminary quote subject to a detailed description. The offer is usually sent via email or SMS text message and will include a reference number.
Step 2: Follow Up
With a quote and reference number in hand, reach out to the company if it doesn't contact you first. You'll want to discuss further details to finalize the offer and confirm a drop-off or pick-up time.
Step 3: Drop-Off / Collection and Payment
Whether you're dropping off the vehicle or having the car picked up, it's hand-off time. The junking company will pay by check or bank transfer. Be sure to ask ahead of time if the payment method is important to you.
Step 4: Processing
One of the final stages of selling a junk car is dealing with the necessary paperwork. During the hand-off, you'll assign the title to the firm and may have to sign off on a few documents. This action also involves advising the DMV of the car's new status as a junked vehicle. Most companies will handle the paperwork but double-check as an extra precaution.
Step 5: Confirmation with DMV and Canceling Insurance
Even if the car junking company claims that it will inform the DMV, it's a good idea to contact your DMV to confirm that this has happened. It's an important step to ensure the vehicle is now junked and off the road. Once you've done this, reach out to the insurance company to cancel coverage. Importantly, don't do this while the car is actively registered; otherwise, you might run afoul of state uninsured vehicle mandates.
What Kinds of Cars Do "We Buy Junk Cars" Companies Buy?
Car junking specialists will typically buy just about any car in any condition. It's a business model that involves converting vehicles in any shape into recyclable materials. All these companies want to do is pay for the privilege of taking a clunker off your hands.
Obviously, the more intact the junk car is the greater the chances of a higher junk value. Remember that you won't get the same price for a vehicle that you would from private buyers or operations like Carvana or CarMax . But, these individuals and outfits are unlikely to want to buy a rusted hunk of metal (if that's what you're selling). Junk or salvage value is minimal, possibly as little as $200 or as much as $400. A vehicle with usable components that are rare or valuable may yield a four-figure value.
How is Junk Value Determined?
A junkyard will value your car based on many factors that include:
- Condition of car
- Number of salvageable components (potentially for reconditioning and resale)
- Weight of salvageable scrap metal for recycling
- Current market value
Salvaging specific components can be a unique business for a junkyard, especially those specializing in junking older vehicles. For instance, a company that focuses on old Ford Mustangs may have a readymade market of collectors and enthusiasts. The resold parts in these operations can range from engines to body panels; and everything in between.
What Else Do These Companies Do with Vehicles?
Not all junk cars are turned into blocks of recycled metal and sellable components. Some vehicles in reasonable condition are resold with salvage titles or auctioned to specialist buyers. Old cars attract a broad range of players who see the value in a car beyond what the previous owner could. It adds truth to the old adage that one person's trash is another's treasure.
Common fates of cars acquired by "we buy junk cars" companies include:
- Car breakers that salvage individual components
- Acquisition by vehicle wholesalers
- Purchase by restorers or car repair enthusiasts
- Sales to private buyers
It's easy to think of a car arriving at a junkyard as being at the end of its life. But often, it's actually the start of a new life, at least for parts of the car.
Benefits of Selling My Junk Car
If you have a no-longer-needed jalopy, there are many benefits to selling it to a "We Buy Junk Cars" company.
1. Speed and Convenience
The first benefit is the sheer speed and ease with which you can get rid of a space-consuming clunker. Paying to keep a car clean, insured, or registered can quickly become a burden. This hurdle can easily be overcome within a few days of using a vehicle junking service.
You can go from quote to hand-off in a short time with a minimum of calls or emails. Compare this approach with the trouble of advertising and selling the car to a private buyer; it could take months. Many customers of car junker services have simply given up after a long time without success going the private buyer route.
2. You Get Paid
While you may not get what you think your beater is worth, you'll still collect money from the junking company. And you'll free up space and reduce expenses in the process.
3. The Car Isn't Wasted
When a clunker has sat on a driveway or in a garage, it performs no function as it slowly degrades. Selling it to a junkyard is an excellent way to ensure that the car or the resultant parts get put to good use. It's an eco-friendly thing to do.