The Sluggish Auto Recycling Business

Automobile recycling is a huge market in America. However, according to the Chief Executive Officer of the Automotive Recyclers Association (ARA), Michael E. Wilson, the acquisition of salvage cars is the biggest problem that is affecting the industry.

Both environmentally and economically, the industry is doing appreciable work. Approximately 95 percent of the cars that retire from use are recycled. The most valued parts of a salvage car, especially those of high output cars like the Honda Ridgeline, are engines and transmissions. These two parts alone can get a seller hundreds and thousands of dollars. Even the smaller parts like the catalytic converters can get you up to $250 each. Apart from these, practically everything from upholstery to tires can be turned into other products by recycling processes. After the usable parts are removed from a salvage car, the gasoline, oil, metals, plastics and antifreeze can still fetch approximately $400. These prices do not fluctuate much, and have been quite stable for some time.

Of late, the percentage of salvaged parts that are used to repair vehicles has increased considerably. This is possibly because the used parts are 30 to 70 percent less expensive than new parts. This is the reason why used car parts are popular when times are hard. As the demand for these parts are increasing with each passing day, their value is also increasing.

Lesser cars are declared salvaged nowadays. In 2009, 19 percent of insurance claims resulted in totaling of the car. Today it has gone down to 15 percent. As a consequence, fewer cars are available for salvage sales. Another problem comes from the fact that a major portion of salvaged cars are bought by foreign buyers. This is to the extent that the purchases from foreign buyers have doubled in the last five years.

The salvage auto industry also gets affected by the home grown salvage operators. They usually buy inoperable or wrecked vehicles and sell them for as little as a few hundred dollars. These operators rarely require salvage permits and often pose as a private individual. Only some salvage online auction site operators can ensure reliable service for the widest possible range of totaled cars. These online auctions are getting popular despite the overall sluggishness in the salvage vehicle market.