How is the scrap value of your junked vehicle determined? Well the scrap value of recycled material varies daily. Take steel and iron. Two or three years ago the Chinese economy was in full swing and growing. China gobbled up every piece of scrap iron and steel they could find. The truth of the matter is that it is cheaper to re-melt metal and re-purpose it versus smelting metal from ore. As the Chinese economic juggernaut dominated the world’s market and to fuel its own domestic expansion, scrap metal was in demand for steel products for the building and machinery industry. Scrap iron prices soared. Prices for your junker were rising to stratospheric levels. $150 per ton (short ton = 2000 lbs, metric ton is 2,240 lbs) or more was typical. A 3,500 lb. truck could be worth over $500 dollars. Today at about 4 cents a lb, the value would only be about 250 – 280 dollars.
Why Are Scrap Metal Prices So Low?
What happened was that expansion of the Chinese economy has leveled off. With excessive domestic production of steel, the People’s Republic is now a net exporter. U.S. scrap sits on the docks that was targeted for sale in the European market. The markets have turned to the Chinese for billet steel instead of scrap. The low demand has driven the value of scrap down. Not only the steel market but the aluminum, copper, lead and brass markets have plummeted, leaving the scrap markets in the doldrums.
Difference Between Scrap & Salvage Value
The typical vehicle contains salvage value which is above the scrap value, if salvaged timely. The longer you wait, the lower the value as parts weather and break down from neglect and non-use. Salvage operations remove the parts; engines, transmission, alternators and other parts that might be in demand like doors, trunk lids and hoods. A salvageable vehicle therefore has superior value to the junker. Iron, steel, copper, lead and other materials are traded commodities. Investment in futures may artificially raise the price of these metals. Even plastics and synthetic fabrics are gaining a lease on life by being recycled into new products.
How Much Do Junkyards Pay for Cars?
So the value of your car is determined on the commodities markets if it is to be scrapped. On the other hand the value is perhaps greater in a salvage situation. Stripping a vehicle for salvage is labor intensive. It you’re a DIY type this is no problem. Transportation is another consideration. A tow/salvage/scrap yard has to consider the cost of pickup versus value. You’ll pocket more cash if you deliver, either drive it if possible, but you can tow it yourself if you are comfortable with the process.
Classic Car Salvage Project
Got a classic? You may want to consider salvaging it yourself. Car manufacturers have to provide parts for 10 years. After that the parts supply starts to dry-up. Many restoration hobbyists travel around the nation trying to fine that “right” part. Mechanical and body/frame parts may have value far beyond their basic scrap price levels.