Last Updated: March 31, 2017
So it’s time — or even past time –- to sell your car for cash. But you really need a good price for it, even if it’s an old car. Maybe you want to put that towards a new car. Or you’ve got another big purchase to make. Or bills to pay off. Or who couldn’t use an extra bit of cash?
So you’re ready to call the salvage yard and tell a junk car buyer to “Junk my car for $500.” Then you’ll wait for an “Okey-dokey.”
Right now, though, you’re more likely to get a sigh. Although things are much better than they were a only a few months ago the market for automotive scrap still isn’t that good.
Auto salvage yards want to give you an excellent price for your vehicle; they really do (although some auto junk yards will scam you). If they can, it means that they will do well, too, when they move your car along for scrap metal after they buy my car.
But in 2017, scrap metal prices are rebounding. So it’s hard to sell my junk car for $500 cash to a junk yard that buys cars near me.
Scrap steel is big business; it’s essential to the steel industry. It can be recycled numerous times without becoming weaker. Reusing steel requires less energy and creates less pollution compared to refining steel ore. Each year, 80 million tons of steel are recycled into new products, including construction materials, appliances, guard rails, fire hydrants, bridges, file cabinets and vehicles.
In 2014, the scrap metal industry was fat and happy. Early in the year, scrap steel was going for $400 per ton. Sellers all the way down the line were doing well. Selling a junk car for $500 cash was no problem.
But then…something happened. By summertime, the price had dropped by about $50. Hhhhmm….not great…but it’ll go up, surely…
Surely not. Prices dropped another $50 during the fall. The biggest shock was waiting right around the corner. During February 2015, the price fell by $80. In one month!
2016 was a fairly steady year and we started seeing rebounds in the market towards the 4th quarter and currently into 2017. However, we still can’t pay $500 for junk cars. Well, not for most of them anyways.
Want to Sell Your Car for $500 Cash? Here Are Reason It’ll Be Tough to Junk Your Car For That Much
Many auto recyclers across the United States are still struggling from the downturn in prices that occurred during 2016. A great deal of yards went out of business even.
- Exports are down: The U.S. used to export a lot of scrap metal overseas. A LOT. To the tune of about 20 million metric tonnes each year. As recently as 2011, that number was 24 million. Not too shabby. But after that peak, the amount kept dropping until it was only 15.3 million tonnes in 2014. And that brings us to basic economics: when demand is low, prices are, too.
- The U.S. dollar is up: U.S. currency is on an upswing. Sounds great, but one effect is that it’s more expensive for other countries to buy American goods. And when products cost more, importers often buy fewer. That leads to, well, see #1.
- Canada is hot: The U.S. is importing more Canadian steel. Canada’s steel industry is shrinking, so they have more to send over the border. And if the scrap is in a city close to American steel mills, it can be cheaper to import metal than to transport it from somewhere else within the United States. Add a weak Canadian dollar to this mix, and imports are where it’s at.
- China is cold. The Chinese economy has slowed down, and that extends to the steel industry. We used to sell lots of scrap metal to China. But if they won’t buy it, we can’t sell it.
- Increasing imports of steel: China produces steel comparatively cheaply to sell to other countries, including the U.S. Because of this, other steel-producing countries are losing business. Where do they go then? To the U.S.! As more and more steel is coming in from other countries, American steel mills are not doing well. Since demand for their product is lower, they don’t need as much scrap.
- The Internet: Makes it easier for others to compete for cars and it’s lead to a globalization of auto sales. There is now greater competition from countries all across the World, most of which have less regulations.
- This will all lead to a volatile market so be cautious.
Depressed yet? Sorry, we didn’t want to kill your buzz after you declared, “I want to sell my junk car for $500” Believe us; we’d like to. We’d love to. But right now, the market isn’t there and we aren’t sure when it will be exactly.
Too bad Junk Car Medics can’t cure it. But we will give you a fair price for your junker. It just might not be the number you hope for. But it will be competitive.
This article was originally published in 2015 and last updated in the spring of 2017. When originally published, the automotive scrap market was at the lowest of lows. Salvage yards were going out of business left and right, the ones who buy junk cars at least.
Things are getting better. So we felt the need to update this post to properly align with the market. And when it comes back fully we will come back and update it as well. So that we can keep you as best informed as possible. Until then We ask you that when you are calling around to places that buy cars and expecting a very high number to not get your hopes up. Instead, get creative. Find ways to make your car more valuable. This post highlights 5 things you should be before selling your junk car. You should read that next.