Tight new and used vehicle supplies, along with strong used parts demand, were the major factors in the average price of junk cars increasing by 55% in the US in 2021. These are the highest prices we have seen since the inception of Junk Car Medics seven years ago. The average price of a junk car increased by $170.85 between the start and the end of 2021.
The average price of a junk car started the year at $311.87. The average price went past $400.00 in April, and stayed above that level through September, peaking at $504.14 in October before finishing the year at $482.72, which is $170.85 higher than at the start of the year.
US junk car prices vary regionally. This reflects local supply and demand conditions, as well as variations in vehicle make, model, condition and content. The price for a junk car in 2021 averaged from a low of $257.90 in the Midwest in January to a high of $582.50 in the Rocky Mountain region in April. For the year 2021, junk car prices increased by $206.60 on the East Coast, $191.90 on the West Coast, $164.25 in the Midwest, $54.27 on the Gulf Coast, and $19.21 in the Rocky Mountain region.*
Junk car prices increased most on the East Coast and the West Coast.
What caused junk car prices to rise so much in 2021?
One major contributor to these high junk car prices was the COVID-19 pandemic-related microchip shortage, which caused the loss of millions of units of new car production. Many buyers who could not find new cars on dealer lots (or who did not want to pay the greatly increased prices) then entered the used-car market, where increased demand there pushed up used car prices to very high levels. Some price-conscious buyers had to settle for older, higher-mileage used cars that required more maintenance. In normal times, many of these bottom-level used cars would have been junked or parted out.
At the same time, many would-be buyers who were priced out of the market decided to hold onto their cars, keeping them out of the used-car market, while many drivers who might have junked their cars decided to fix them up and drive them longer – or just let them sit.
Meanwhile, the reduced supplies and the increased demand for used car parts (thanks to owners trying to keep their older cars running and those bottom-level used cars that were not entering the used parts market) pushed up the values of junk cars. These cars were now being purchased not by junk dealers for their scrap value, but by auto recyclers who would be selling them for parts. This made junk cars much more valuable and brought higher prices. And that’s where we are today.
*All prices shown are for mid-size sedans, which represent the largest segment of the total junk car market.