The first thing that most people who are thinking about junking a car want to know is this:
What is the value of my car?
Well, we here at JunkCarMedics.com are glad you asked! We make it easy to understand the salvage value of a car, so here goes:
The salvage value of a cars is determined primarily by two factors:
- The number of pounds or tons of each type of metal that is in your junk car
- The per-pound or per-ton value of each of those metals in your junk car
Junk cars generally don't have much value beyond their weight in metal because they are usually cars that are really old or beyond repairable.
No one is going to have a need for the parts because of that. Few of these cars still are on the road and the ones that are will be coming off soon. Therefore, the value in a junk car's parts don't really impact it that much.
We’ll go into more detail later, but let’s first take a brief look at how the scrap metal market works.
The scrap metal market is international in scope
The world’s metal markets are worldwide, complex and ever-changing. The scrap metal that is recovered from junk cars becomes a commodity that enters this international market and is then subject to the laws of supply and demand.
These are the primary factors (but not the only ones) that can affect scrap metal prices:
- The current amount of scrap metal that is available
- The current level of industrial activity that requires scrap metal for its operations
So when economies around the world are booming and scrap metal supplies are tight, scrap prices are high. When those economies slow down and the scrap supply increases, prices drop. That’s supply and demand!
The predominant metals found in your junk car that are traded on world markets are steel, iron, aluminum, and copper. Prices on these markets can fluctuate on a daily, weekly, and monthly basis.
When reprocessed properly, scrap metals retain all of the qualities of freshly-produced metals. This makes scrap metal perfectly suited to being recycled into new metal products.
Each type of scrap metal has its own unique story in the world’s metals markets. Let’s look at steel, the predominant metal found in most junk cars. Scrap steel competes against freshly-made steel of various types that is produced by many countries.
You might think that scrap steel has a pricing advantage, because it has already gone through the complex production process that converts it from raw ore into a finished product. But that’s not always the case. Some countries (like China, for example) subsidize their steel industries so that they can sell certain types of freshly made, semi-finished steel for less than it costs to produce.
These subsidies give new Chinese steel a price advantage over scrap steel from the US. Countries like Turkey, which had previously been the largest overseas buyer of our scrap steel, are buying this semi-finished Chinese steel instead and turning it into various types of steel products in their steel mills.
The result? American scrap steel sits unsold. This glut of scrap has depressed prices in the US and elsewhere. Making things worse, Chinese steel companies overproduce, adding to the steel glut. Until recently, both copper and aluminum prices were also at multi-year lows. What this means to you is that your junk car is worth less than it was a few years ago.
The pandemic has helped some metals prices
While the global COVID-19 pandemic has caused huge problems for people around the world, there have been some unintended positive consequences for metals pricing. Metals production and manufacturing companies were shuttered during lockdowns worldwide. This resulted in reduced metal supply. Because China locked down first, and recovered first, the current post-pandemic demand for metals by Chinese manufacturing companies has grown greatly.
This has resulted in a jump in copper prices to 2 ½-year highs (as of October 2020). There are also increasing shortages of aluminum, which are expected to lead to price increases for this key metal. Unfortunately, steel prices are still dropping, thanks to the supply glut and ongoing steel subsidies. And since steel is the largest single element by weight of most junk cars (as shown below), these recent price improvements won’t make a huge difference in the total value of your junk car.
Of course, things can change quickly in this crazy COVID pandemic world – if more of the world has to suddenly lock down, industrial activity could falter, reducing the demand for scrap metal and causing drastic price drops. If this should happen, your junk car will lose value.
What this all means for the value of your junk car
What we end up with is an elaborate equation based on the amount of each type of metal in your specific year, make, and model vehicle, combined with that day’s market prices for each of those metals, plus the value of parts that can be removed and resold. To make things more complicated, there is not a single answer to the question, “What is my junk car worth?” Different scrap yards and junk car processors will give you different prices. That’s why it’s so important to shop around – and be sure to let us at JunkCarMedics.com give you a great price for your junk car!
And now, a reality check
Before you estimate the amount of each metal in your junk car, the value of its reusable parts, calculate what it’s worth, add it all up, and expect to get that much, remember this: Your friendly local scrap yard has some work to do before your car’s metals content is ready to be sold into the metals markets. There are many steps required to transform your actual scrap car into recyclable metal. Here’s what must be done after the tow truck shows up to pick up your scrap car:
- Tow your junk car to the junk yard
- Remove all fluids,
- Remove items that can be resold
- Remove remaining non-metal components (carpets, sound insulation, etc.)
- Remove remaining non-crushable components (non-resalable engine transmission, axles, suspension, etc.)
- Crush or flatten the junk car
- Shred the junk car, then separate the fragments by metal type
- Deliver metal fragments to reprocessing companies (or prepare them for pickup)
All of this takes time, energy, and labor, which the junk yard must recover. These costs are figured in when you get a price for your junk car. This is why it’s important to shop around when junking your car, getting as many prices as you can before making a final decision.
Get the Best Salvage Value for Your Car at Junk Car Medics
We hope that this has given you a better understanding of the many factors that determine what your junk car is worth when you decide to sell it. Bottom line, every junk car is different and will have its own unique value at any given point in time.
And when the time comes to part with your junk car and turn it into cash, you'll find the process is just better at JunkCarMedics.com. JunkCarMedics.com takes the hassle and pain out of scrapping a car for cash.
JunkCarMedics.com works with reputable auto junkyards, local car dealers, car auctions, and independent car buyers in your area, making us your #1 choice when looking to get cash for cars.
Through our huge network and streamlined process, we get you an instant offer to junk your car that is sure to beat the competition. Avoid the hassles of posting your car for sale online or dealing with shady auto junkyards when you work with JunkCarMedics.com.
The whole process takes only one or two days from start to finish. We'll be here for you all along the way, even after the sale (we even guarantee your checks). Join the thousands of satisfied customers each month who choose JunkCarMedics.com over the competition. We make it easy!