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What you get paid for a car that you are trying to sell depends on several factors. If the car has over 100K miles and is over 10 years old, odds are that it will be junked by a company like ours. If it is to be scrapped or junked it will be crushed and sold for what the weight of its metal is worth.
The lower demand for scrap metal in countries like Turkey and China has caused the price of scrap metal to drop by 50 percent in four years, according to the Buffalo News. Manufacturing in China has slowed considerably, therefore those manufacturing organizations aren’t paying what they used to for scrap metal.
The scrap metal trade in the U.S. is a $105 billion a year industry. So many metal products were manufactured in the United States decades before any other country that the scrap metal sector has established the foundation for many other sectors of heavy industry.
“According to data from the Steel Index, U.S. scrap steel prices were about $200 per ton last month, compared to more than $400 per ton in 2011 and 2012,” the Buffalo News reported.
This pricing pressure has caused dozens of yards to close since last year. The Wall Street Journal reports that the price of scrap steel went from $261 a ton in the spring of 2015 to $203 a ton in the spring of this year.
Since production of U.S. steel has dropped 11 percent to 78.9 million tons, that slowdown also contributes to the diminished demand for junk cars. In the U.S. over 60 percent of its steel is produced using scrap metal as its raw material.
Some yard owners are stockpiling scrap motor vehicles until prices pick back up. Although 10 to 12 million cars are junked yearly in the U.S., most yards are family owned and operated such as our yard in Ozone Park, Queens, New York. We have established relationships with mechanics, dealers, peddlers, and other professionals in the automotive community that help keep a business like ours in operation.
A car that was junked for $500 a few years ago can now easily go for around $50 to $150 depending the year, make, model, weight, and condition of the car. The good news is that record sales of new autos have stabilized the prices as factories need more steel for new cars. Further, as the influx of scrap metal has curtailed, demand for it is starting to rise. Hence pricing is forecasted to start increasing too.
If there is a wholesaler that purchases the car for immediate or expeditious resale, then perhaps you could generate more revenue for your used vehicle. However, ease of credit access due to low interest rates that helped record sales new autos, have hurt the used car market considerably. So we get stuck in a dilemma of people wanting to sell their used cars with less buyers. Even people with terrible credit can get a loan for new car. However, feel free to call us if you have a car in operable condition with minimal issues, and we can potentially pay you more for it.
The truth is that if you have the time to wait around while people come kick tires, test drive the vehicle, check the oil, do push-ups to look under your vehicle, or even drive it to their mechanic to be inspected, then you can potentially make more money for your used car posting an ad on Craigslist or Ebay. However, if you do the math, you may not be valuing your time that well if you’re jumping through hoops to make a couple of hundred dollars more for a very old vehicle. If you have to put in work to have it in selling condition, you’re also making a monetary investment that’s not guaranteed to return. Further, if you have to pay for insurance another month or months to keep it on the street, you also have to factor in that as a cost of goods sold. So insurance costs drop your profit as well.
Most of the time with a very old car, the best solution is to donate it to a wounded veterans’ charity or junk the car for a few bucks to stay ahead; either way you save on towing costs; if it breaks down on a highway, you’ll have to pay to have it removed, we can’t even help you in that situation.
You rarely get the money you put in your car because they all depreciate so dramatically. In this case it is not cheaper to keep her.