The auto recycling business or junkyards and salvage yards operate in an industry full of scams and schemes. The most common junkyard schemes take your junk car and not pay you a fair price for it, if you receive any money at all.
It's easy to see that from payment schemes to misvaluing your car, dishonest junkyards can take advantage of you if you don't do your research first.
Knowing these can mean the difference between a fair price and a bad deal.
Valuing Your Car at Zero
If a junkyard tells you that your car is worth nothing, there's a good chance they're either mistaken or trying to commit one of the most common junkyard scams.
A salvage yard will tell you that even though it isn't worth anything, they can haul your car away for free to save you time. It seems like a great deal.
Here's a junkyard tip - for a car to have no value, it would need to contain no worthwhile recoverable scrap metal and no valuable electrical or computer parts. Even a car rusting in a driveway will have something worth salvaging.
A bait-and-switch deal is when a junkyard attracts a potential customer with an appealing offer ('the bait') and then changes the agreement at the last minute to something lesser ('the switch') that in ordinary circumstances, upon which the customer would have never agreed.
Offering a Lower Price at Pick-Up
Offering a much lower price than previously quoted when picking up the vehicle is a frequent 'switch' strategy. It uses desperation as a motivator and the fact that we all have busy lives. What's a couple of hundred dollars difference if they can take the car now?
You may be so happy to see the vehicle go; you'll settle for less rather than find another buyer.
Part of the switch may also be adding fees to the price offered for things like towing, administration costs, or paying for the owner's time instead of lowering the quote directly.
When you receive your quote, ask what it includes and what fees it doesn't include. The person providing the quote from a reputable salvage yard or junkyard will be aware of scams in their industry and should be able to break things down for you if you ask.
One of the most common charges that get added to the quote after the fact is: towing.
Most companies have either an in-house towing service or a relationship with a specific towing service to pick up cars to provide them with a lower rate. They know to expect that there's a good chance the vehicle won't be road-worthy, and the quote they give you should already take towing into account.
Showing Up Without Payment
If a buyer or tow truck driver shows up without payment, don't let them take the car.
Until an agreement is signed and you have cash in your hand, you can walk away from any deal. Many of the top junkyard scams prey on the fact that people feel they can't back out once they receive a quote and will take less.
You can walk away, and you should if you think you're being scammed or not receiving the promised amount.
Cash on delivery is the safest and preferred method of being paid for your vehicle.
That's not to say that every junkyard and salvage yard is trying to scam you if they offer other methods of payment, but they can come with some potential problems. Do your research and look to see if other customers have had problems getting paid.
These incentives are often coupons for discounts, trade-in offers, or other promotions like cruises that a junkyard owner may offer you in exchange for reducing the amount they will pay you for the car.
Unfortunately, these coupons usually have restrictions and limits placed on them and are rarely ever worth the difference or make up the amount they take off the price.
Issuing Bad Checks
In general, it's a good idea not to accept checks in exchange for your vehicle because canceled checks or those without the funds will bounce when you try to cash them.
A bad check could cost you money if your bank charges a fee for checks that the bank can't cash.
Like bad checks, payment plans require you to trust the junkyard. How can you be sure that payments will show up on time?
A reputable salvage yard that isn't involved in scams will have enough cash to pay for any vehicles they purchase upfront. Those vehicles are how they, in turn, make their money, so not being able to buy their supplies means they can't make a profit.
Not Handling the Legal Paperwork
Often included as part of the deal or an added incentive, a yard may offer to handle all the paperwork for you to save you time. Please consider this a red flag.
Until you cancel your registration and the title is transferred, you're legally responsible for what happens to that car, including any charges that accrue because of it.
That means always cancel your registration in person first before you transfer the title to the buyer. Disreputable yards could hold that vehicle and use it for whatever they like, and you would be responsible.
They may even say that you left it with them and then charge you for parking and storage.
To be safe, cancel things in person before the junk car is picked up and take your plates. If the junkyard has a problem with that, walk away and move on to another business.
Operating Without a License
Not only does operating without a license pose a risk for being scammed, in most parts of North America, it's also illegal. These companies fly under the radar and won't care if they treat you fairly.
Ask to see the company's license and make sure it hasn't expired. Some areas may even have a way to enter the license number into a database and learn more about the company and any actions against them.
A reputable junkyard will be proud to show you their credentials, and any push back against seeing it should be considered a red flag.
Purchasing used and junk cars isn't something that everyone knows about, and this can lead to scams when the junkyard intentionally misrepresents themselves or the value of your vehicle.
- Say the car is worth much less than it is
- Accuse you of not having the necessary paperwork, and they have to charge you to fix it
- Refuse to show you their work (i.e., the break-down of the price)
An honest, licensed junkyard will show you all the information and help you make the right decision. If you choose to walk away from the business, they will understand and won't add more pressure other than asking if you're sure.
How You Can Avoid Junkyard Scams
Avoiding common junkyard scams takes a little bit of research and a little bit of time, but with these pieces of advice, you can get what your car is worth.
Work Only With Licensed, Reputable Yards
Reputable yards are less likely to try to pull a scam on you.
Ask friends and family for referrals to junkyards they've worked with in the past, check online reviews, and then check to make sure their licensing is up-to-date without any penalties or government actions.
Don't settle on the first reputable junkyard you find. Instead, find 3 - 4 nearby junkyards that meet your criteria so you can get multiple quotes.
Research and Know What Your Car is Worth
Using Black Book values or online calculators like Consumer Reports' Car Value Estimator lets you input the year, make, and model of your car and details about its condition and then gives an estimate of what the car would have as a resale value.
Get Offers in Writing
A verbal agreement settled with a handshake is the old way of doing business, and it probably won't stand up in court today.
A reputable junkyard will want everything in writing. Take the refusal to put it in writing as a red flag that it's one of the top junkyard scams, and walk away.
A written offer protects both of you and sets the terms down so that there are no misunderstandings over the terms of the sale or the amount that the yard will offer.
When you have the written offer, you should have time to read everything over before signing, and the business should fix any changes to the offer you request.
When you're reading everything over, double-check all the information about your car, such as the vehicle identification number, the condition of the car when you sold it, and details like color and model to avoid any possible issues of misidentifying the vehicle.
Avoiding common junkyard scams can be as easy as doing your research and trusting your gut. Don't forget to walk away if things seem too good to be true or if you're not getting what you need from the business.
Many businesses buy junk cars; you're allowed to be picky about which one gets your business.