If you’ve ever been wondering what to do with an old vehicle that you have, you may have come across companies promising that “we buy junk cars” and will give you instant cash for that clunker you have taking up space in the garage or on the driveway.
Some are unfamiliar with how these services operate, what exactly they offer and whether or not it’s a good deal when you use the service.
Hopefully, we can shed some light on this unusual business model, the benefits it can bring to you but also the things you need to watch out for when using them.
How Does a “We Buy Junk Cars” Business Work?
The car junking market is a massive one. It’s part of a larger automotive recycling industry which is currently worth more than $32 billion each year in annual sales, employing more than 140,000 people and operating in some 9,000 locations around the nation.
It’s such a large industry because as things stand, about 100 percent of automobiles in the US get recycled now, which means the more cars there are on the road, the more recycling capacity the country needs.
The junk cars model is fairly straightforward and in fact is designed to make getting rid of an old clunker as fast and painless as possible. These companies tend to target car owners who have vehicles that are either too old, unusable, broken down, taking up space in the garage or on the driveway, and may otherwise be hard to sell to a private buyer.
More often than not, they are older cars, but sometimes even newer cars are junked because it’s the fastest and easiest option.
Step 1: Make an Inquiry
The first step is the customer makes an inquiry with the car junking business. There may be a set of data fields where you enter the car’s make, model, and year and get an instant advisory quote that is subject to a more detailed look at the vehicle. The quote is typically sent via email, or possibly SMS text message and will contain a reference number.
Step 2: Follow Up
Upon receiving your quote and reference number. You have follow-up contact, either the car junking company calling you or you getting in touch with them, but most often the latter. You quote your reference number and talk some more details about your car to get a final quote. You then arrange a time either to drop off the car at their collection center or have it picked up from your home.
Step 3: Drop-Off / Collection and Payment
The next stage is to either drop off or have your car collected. At whatever point the car is handed over to the other party, you are paid either by check or direct bank transfer. A lot of these companies make a big point of telling customers that they will get paid on the spot in a way that allows them to use the money instantly.
Step 4: Processing
The final stages of the process involve processing the required paperwork, including amending the title, informing the DMV that the car is now being junked, and so on. Most of the car junking services will complete all these steps as a way of making it as easy as possible for you.
All you have to provide is the title for the vehicle that you are junking and possibly one or two pieces or additional paperwork depending on the situation.
Step 5: Confirmation with DMV and Cancelling Insurance
Even if the car junking company claims that they will inform the DMV, it’s a good idea to contact your local DMV and confirm that the car has been junked and is no longer on the road. This step is important because you have to be 100-percent sure that the car in question is junked and declared off the road before you go ahead and cancel any insurance that you have on it.
If you cancel the insurance while the car is still registered as active, you can be red-flagged in the system as having an uninsured vehicle, which creates additional problems.
What Kinds of Cars Do “We Buy Junk Cars” Companies Buy?
Car junking specialists will typically buy just about any car in any condition. Since their main goal is to convert the car from its former shape and form into recyclable materials, it’s almost irrelevant as to what condition it’s in now. They’ll take it off your hands and give money for it.
Obviously, the more intact the junk car is, the more potential junk value it has. It should be remembered that junk value on a car is typically the absolute lowest value there is. If you junk your car, you won’t get the same price or even a close price as you would if you were selling it either to a private seller or a reseller like Carvana.
Junk value --- or salvage value --- is low, but can still be several hundred dollars or possibly thousands depending on its value to the junker. The average is about $300, with rates between $200 and $400 being the most common.
How is Junk Value Determined?
A junkyard will value your car based on a number of factors that they use as part of their value calculation. These factors include, but are not limited to:
- 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 neat business for a junkyard, especially for those who specialize in junking older vehicles. While some are junking their old Ford Mustang, for example, the company may find numerous engine components that they know they can sell to collectors or enthusiasts who are working on restoring or repairing Mustangs.
Junkyards are usually very well connected to various parts of the automotive industry, especially as suppliers of hard-to-find components no longer manufactured by OEMs.
What Else Do These Companies Do with Vehicles?
Not all junk cars are turned into blocks of recycled metal and sellable components. There are some that are sold in very reasonable condition and thus can actually be resold with salvage titles, or auctioned off to specialist buyers.
There are many interested parties in old cars; people who see value in the vehicle beyond what its previous owner could. It adds truth to the old adage that one person’s trash is another’s treasure.
Common fates of cars sold to “We Buy Junk Car” companies include:
- Sold to car breakers --- salvaging for individual components
- Sold to vehicle wholesalers
- Sold to restorers or car repair enthusiasts
- Sold directly to private buyers
It’s easy to think of a car arriving at a junkyard as being the end of its life, but very 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 clunker that you no longer need, there are many benefits to selling it to one of these “We Buy Junk Cars” companies.
1. Speed and Convenience
The first benefit is the sheer speed and ease with which you can rid yourself of a clunker that is otherwise taking up space and possibly costing you money. If you’re having to pay to keep the car clean, or to keep it insured or registered (just in case, right?) then these cars can quickly become a burden. That can end within a day or so if you use a car junking service.
You can go from quote to collection in a very short time and with barely a few phone calls or emails. Compare that to the trouble of advertising, showing and selling the car to a private seller, which could take months. Many users of these services have been trying to sell a car for a long time before finally resorting to using a junking service.
2. You Get Paid
It’s not a lot, nor as much as you’d get for selling, but you do get money for a clunker sitting and taking up space at your home or another location. If the car is costing you money monthly, getting any sum for it and stopping the need to shell out each week or month is a blessing in and of itself.
3. The Car Isn’t Wasted
When a clunker is sat on a driveway or in a garage, it is performing no function and serving only to waste and degrade. Selling it to a junkyard is a good way to ensure that the car, or the constituent parts of the car, go to good use.
In other words, it’s a more eco-friendly thing to move your car on to a junkyard where it will be recycled instead of becoming increasingly useless by sitting there and rusting away into nothing.