How much is my car worth in scrap?
Posted On: July 18, 2017
If your vehicle is closely at the end stage of its useful life, you might be moving around from one junk yard to another to get a few quotes. Of course, you may be also interested to know about the current scrap auto rates in the market.
Whether you sell your vehicle for scrap or call for automotive recycling, there isn’t much left to do. As at the end your vehicle will be stripped of its metal parts and recycled, this is indeed the final stage of a vehicle’s life. However, automotive recycling is very straightforward as some of the metals can be used in new automobiles.
In fact, now there are cash for old clunkers operating in most of the countries. So if you have a less-than-perfect automobile, you can sell it to them rather than spending weeks of efforts trying to sell it via the classifieds or in a scrap yard or dealership.
Scrap metal prices – How they affect the selling of your vehicle for scrap?
When you decide it’s time to scrap the damaged or broken-down vehicle, the odds are that you are hoping for, making a little bit of money out of it. But, the amount of cash you can get for your scrap vehicle fluctuates widely, in contrast to the prices of used cars which only varies a few percent up or down during the year.
Why is it so?
If you want to know why scrap car prices fluctuates that way. You need to understand from where the value comes in for a vehicle at each stage of its lifecycle. A used vehicle is still a vehicle. Even though, there’s a very less value in the fact that it is a useful tool. But at least it is still driveable.
On the other hand, a newer or unique, damaged or broken-down automobile can be repaired, so as to regain some value and utility. Whether it is a newer, low-mileage or really worth having an automobile. It will still have good value in its parts even if it is totalled. It is just a calculation. According to experts in the automotive industry, a damaged automobile with good mechanics and a broken-down vehicle with bad mechanics is equal to one good vehicle that is driveable.
The common thing in all of the above situations is that these automobiles are worth even more than the basic cost of their components, or at least what their components are made of.
However, if you have an old automobile that is not exotic or rare, has high mileage and whose mechanic and structure are shot, it may have little or no worth as a vehicle. And, this where automotive recycle comes into play, as it’s only indeed worth the metals it consists of.
Now the question arises, how to find the value of my car? Keep reading.
How to determine the scrap car prices?
The value of a scrap car is intrinsic to the price of metals, it is made up of. When reaching at the scrap stage, a vehicle stop competing with other automobiles for dollars, now it’s worth is based on the current prices of metals. And, because metals are commodities, its prices go up and down daily, sometimes they fluctuate by huge amounts.
Recently, we’ve been in a bit of a scrap metal rut. Since 2012, the prices of scrap metal have been failed completely. In early 2015, there was a bit of a short-lived rebound, but it ended as soon as it started. The rate of steel was $544 per metric ton in January 2012. It falls to $90 per ton in March 2016. And lately, the scrap steel price is shredded in the US to $195 per metric ton.
Remember, your vehicle is not only made up of steel, it has other valuable metals too. These include copper, iron and aluminium.
An average passenger automobile such as car, van, truck, 4WD or SUV weighs around 4,000-pounds. And, according to the World Steel Association, 55% or say 2,200 pounds of those 4,000-pounds, which is nearly close to one metric ton come from steel. The same vehicle boasts roughly around 330-pounds of aluminium, according to the Aluminium Association.
How they affect?
If we assume that you have a completely average machine and it has one metric ton of scrap steel, which is $195.
Then, your 327-pounds of aluminium at the rate of $0.55 per pound will sum up to $180. If add in another $100 for some of other recyclable components such as a little bit of platinum in the catalytic converter and the lead in the battery. A completely average, not-roadworthy scrap car has a scrap value of about $475 according to its weight. However, that’s just the value of the metals it composed of and excludes the labour or other costs that are actually involved in recycling the car.
If your car is non-running, it needs to be towed to the salvage yard, which will cost around $100. After this, you need to pull off all the things that is not recyclable and needs to be disposed. For example, carpet, lights, interior, fluids and plastic trim. However, make sure to separate the metals first. At the last, you can shred the body and frame into a useful bit of steel.
All of this takes a considerable amount of time and labour, which cost some money for the recycled. Now the $475 of metal extracted from your vehicle is really only worth about $100. Based on the location and the weight of your vehicle, that number can fall even more.
Why scrap metal prices are changing so rapidly?
Now, this is a question whose answer lies in the intricacies of global economics. In the beginning of 2010s, some countries, particularly china, were using a lot of steel to manufacture materials. Therefore, the international demand for scrap steel was high. In fact, it was so high that the production was out-pacing, which leads to record high steel prices for scrap steel as well as a billet.
Lately, the demand for steel has reduced dramatically. When China was trading in huge amounts of billet steel, countries like Turkey were purchased most of the scrap steel which was coming out of the US. Currently, China is still manufacturing steel in huge amounts.
Steel and oil boom or bust together
The oil industry is one of the great users of a large amount of steel. Thus, when the prices of oil are at its peak, the rates of steel eventually go higher. This relationship causes a slight rebound in steel prices. The US oil and gas production is rising because of the huge oil fields in the Dakotas and other areas around the country.
It was quite detailed for the regular readers, but I hope that it helps.