Have you ever wondered what to do with an old clunker? We're talking about a vehicle long past its prime and without any trade-in value. With this in mind, you may have come across firms promising "we buy junk cars" and offering cash for a jalopy taking up garage space. For most car owners, such operations are unfamiliar territory.
This article will shed light on the "we buy junk cars" business model by revealing the benefits and pitfalls of using these types of services.
How Does a "We Buy Junk Cars" Business Work?
The junk car market is a massive one. It's part of the more significant automotive recycling industry which accounts for $32 billion in annual sales. Add in 140,000 employees and 9,000 recycling locations, and the scale of things becomes clear; this is a big business. And, with almost 100 percent of cars in the U.S. ultimately getting recycled, there's no end in sight for this activity.
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The "we buy junk cars" model is straightforward; it offers car owners a fast and painless way to get rid of a clunker. These companies primarily target people with older, unusable vehicles seeking to open up valuable space in the driveway or garage. In other words, these are vehicles with little appeal to a private buyer or a dealer. However, while these vehicles tend to be less modern, it's not uncommon for an owner to "junk" a new-ish car because this is the fastest and easiest option.
Step 1: Make an Inquiry
A prospective customer begins the journey by making a website inquiry with a car junking company. Complete the data fields, which may ask the car's make, model, and year. In most cases, the seller will receive a preliminary quote and a reference number via email or text.
Step 2: Follow Up
With the quote and reference number in hand, follow up with the company to confirm the details and finalize the offer. In some cases, the car junker may first reach out to you. At this point, decline the offer or coordinate a drop-off date and time. For an inoperable car, the company will schedule pick up.
Step 3: Drop-Off / Collection and Payment
At this point, the car gets dropped off, or the company will collect it. At the handoff, the seller receives payment. These funds may be in the form of a check, bank transfer, or some other method. One of the key selling points for these companies is that payment is usually made instantly.
Step 4: Processing
The last stages of the process involve dealing with the required paperwork, such as revising the title and updating the car's status with the DMV. Most of this activity is handled by the car junker as the seller usually just needs to hand over the title and sign a few forms.
Step 5: Confirmation with DMV and Cancelling Insurance
Even if the company promises to update the DMV about the change of ownership, it's worth the effort to confirm these details on your own. You want to ensure that the vehicle has actually been "junked" and declared no longer roadworthy. This is also the time to cancel any insurance, but don't do anything before verifying the car's status with the DMV. Otherwise, state records may show you have an actively registered car that's uninsured (this can cause problems).
What Kinds of Cars Do "We Buy Junk Cars" Companies Buy?
Car junking specialists will typically buy just about any vehicle in any condition. This approach makes sense as the main goal is to convert the car into spare parts and recyclable materials. However, the more intact a junk car is the more potential junk value. A clunker won't have anywhere near the value of a driveable vehicle that might get sold to a private seller or CarMax , but value still exists.
We're talking about a junk or salvage value of a few hundred dollars in most cases. $300 is average; a range of $200-$400 is typical.
How is Junk Value Determined?
A junkyard will value the car on many factors as part of the value calculation. These factors include, but are not limited to:
- The car's condition
- 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. The junking of an old Ford Mustang, for example, could involve the extraction of hard-to-find components that get sold to enthusiasts and restorers. Successful junkyards have a strong network of purchasers and resellers, especially for niche out-of-production parts.
What Else Do "We Buy Junk Cars" Companies Do with Vehicles?
Not all junk cars become spare parts and blocks of recycled metal. In some cases, operable vehicles (or ones that can become drivable) are resold with a salvaged titled or auctioned to a specialist buyer. Such situations are more likely to occur with an older classic or a more valuable car. This is a good example of, "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 that a car is at the end of its life upon arriving at a junkyard. But, some may see a new life or at least help other cars continue on.
Benefits of Selling My Junk Car
There are many benefits to selling an unwanted clunker to a "We Buy Junk Car" company.
Speed and Convenience
It's hard to beat the ease of getting rid of clunker with a few online clicks. Space gets freed up, and there's no more insurance or other expenses to worry about. In a matter of days, there's one less burden to deal with, and you've escaped the hassles of finding a private buyer (assuming the car is even appealing).
Selling a junker probably won't pay for an elaborate vacation, but some money is better than nothing. And you may save money by no longer incurring expenses. Newly available space may be a bonus, too.
Help the Environment
A rusting clunker can deteriorate to the point of contaminating the environment. Fluids can leak into the ground, and rusting metal becomes an eyesore and safety hazard. Professional junkyards store cars and components away from people and employ measures to limit contamination hazards.