Price Increases Have Even Reached the Wrecked Car Industry
The price of everything is going up. From milk to gas, there has been a sharp increase in the cost, production, and selling price of the basics. This is true for cars as well. Used cars have seen a dramatic increase in price due to a reduction in new car manufacturing because of production slowdowns and a shortage of parts.
This rise in prices has even affected the wrecked car industry. Salvage cars for sale have also seen higher prices on the auction blocks at places like A Better Bid (ABB) salvage autos auction site. Despite that, if you are looking to buy a car at an affordable price, then A Better Bid (ABB) car auctions is the place to go as it is an industry leader in used and salvage car auctions.
Price Increase in Salvage Cars for Sale
The pandemic almost ceased the production of everything around the world, but even though things have slowly started moving again, many car manufacturers cannot finish building their vehicles due to a lack of chips. The United States government has made this a priority, but that does not solve the problem at car companies like Ford, which has a car lot full of unfinished trucks waiting for chips.
Because of the empty new car lots and low sales, there has been a slowdown in trade-ins as well. This hurts the used car industry by reducing the inventory numbers, and it costs the consumers because it raises the price of used cars and trucks.
This pricing dynamic has made its way to wrecked vehicle costs as well. There are reports that the global average selling prices in the second quarter of 2021 have climbed to over 20% compared to the second quarter of 2020. Even worse, there was a 48% increase in prices for the first quarter of 2021 from the previous year.
Places that specialize in selling salvaged cars, like Copart, have indicated that insurance companies would rather auction off a wrecked car instead of paying to repair it. In addition to the above problems, auto insurance companies have deemed that the cost to repair newer cars is more expensive than they are worth.
Newer cars are more sophisticated than the cars of the past; so when it comes to replacing parts, oftentimes there are unrelated parts that need to be replaced at the same time. Today’s cars have so many safety sensors on them that it is no longer feasible to just replace a bumper. There may be sensors that assist in parking or slow the vehicle down when in cruise mode along with sensors that indicate there is a person in the crosswalk. All of these little things drive the cost up, which can result in a totaled-out vehicle.
Junk Cars
When a totaled-out vehicle is sold to a junkyard through an auction like Copart, the vehicle may not be a mess of metal. It is a wealth of reusable parts for car repair shops and local mechanics.
A car may be totaled out by an insurance company because the cost of the repairs exceed the worth of the car, or it’s beyond repair. Either way, if this vehicle is now considered junk and cannot be salvaged, it cannot be used for anything other than a parts car.
If the car repair shop needs a part for a body shop claim, the insurance company may tell them to check with the junkyards for used parts rather than spend the money on a new part. A few parts salvaged from a newer model Volvo can help insurance companies and body shops replace parts for a fraction of the cost of a new part. This makes a junked car very valuable.
The chips in cars make them worth even more than before the chip shortage. With a semiconductor shortage, any of these types of parts in a junk car will bring higher prices than before.
The price of scrap metal is also rising, making junk cars even more valuable. According to a 2021 CBS News report, the price of used cars, including junk cars, may continue to rise until 2023 or beyond.
If you are in the market for another vehicle, then here are some places that you might find helpful:
A Better Bid
A Better Bid is a registered Copart broker giving you access to over 300,000 vehicles for sale daily, featuring repairable cars, trucks, motorcycles, RVs, jet skis and much more. They hold over 150 weekly live auctions which are open to the public – so you do not need a dealer’s license to join, and since they are an all-online auction, you can bid from the comfort of your own home.
Fairway Auto Auction
Fairway Auto Auction is located in Edgerton, WI. They offer online bidding, but you must be a dealer to buy and sell at this auction.
Columbus Fair Auto Auction
Columbus Fair Auto Auction opened its doors in 1959 and is located in Columbus, OH. It hosts both dealer and public auctions. Their auctions are scheduled on Wednesday mornings.
Orlando Longwood Auto Auction
Orlando Longwood Auto Auction is located in Longwood, FL, and it holds auctions every Friday. It is a dealer-only auction.
Conclusion
Since the price of used cars is not coming down anytime soon, if you are in the market for a used car, you might want to consider a salvage car. For those who want to sell their wrecked car, there is a large market ready to snatch up anything that you have to offer.
