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Your goal, if you’re looking to sell an old or unwanted car, should be to get as much money as possible for it. And a few years ago, selling a junk car for $500 was easy. You could easily net enough for a weekend road trip. Today you’d barely get enough to pay for a hotel room. What gives?
Cash for car services (including Junk Car Medics®) didn’t suddenly start taking advantage of you. We’re facing a big problem: the price of scrap metal has plummeted in the past several years. Junk cars that have reached the ends of their lives are bought by auto salvage yards. Those cars are stripped of all materials and fluids and crushed, with the remains sold to a local shredder. We (and other junk car buyers) can't get nearly as much for these cars as we previously could. And believe it or not, it's a lot of work to tow a car, strip it and crush it. As a result, the price we are able to offer to buy cars has been greatly reduced, and you’d be really lucky to get $500 for your junk car.
But why are current scrap metal prices suddenly so low, even when compared to last year’s scrap car prices? How does that affect the junk car industry? And what can you do to ensure you get the highest value possible for your junk car? We have the answers.
- The Good Ol' Days
- How Scrap Car Prices Impact the Value of Your Junk Car
- History of Metal Market
- Current Scrap Car Prices
- Understanding Scrap Metal Prices for Scrap Cars
- Why Scrap Metal Prices Constantly Change
- How Often Do Prices Change
- How to Get The Best Scrap Car Price For Your Car [8 Ways]
Selling Your Junk Car for $500: The Good Ol’ Days
Back in the day, selling a junk car used to be worth big bucks, and this is largely because the value of scrap metal was high. Junk dealers weren't buying a vehicle because they thought they could fix it up and get it to run again — they were buying it for the scrap metal. But since the real value of a junk car is in the metal, the rules of supply and demand take effect as well.
Not long ago, it wasn't uncommon to get anywhere from $500 to even up to a couple thousand dollars for a junk car just because of its value in scrap metal.
Unfortunately, these days, scrap metal's value has plummeted and so too has the price for the average junk car or truck. Not long ago, manufacturers were paying close to $500 for a ton of steel. Today? About $50. As a result, you can't expect to make bank for your old clunker. But at the same time, this doesn't mean that turning it in for cash to a junkyard still isn't a viable and lucrative option under the right circumstances.
How Do Scrap Prices Affect the Value of My Junk Car?
You might be asking why scrap metal prices have any bearing on the offers you get for your junk car. According to an article on ETF.com, the average car contains 2,400 pounds of steel. The average truck contains 3,000 pounds. That accounts for about 55 percent of the car’s total weight. There’s also approximately 300 pounds of aluminum in the average vehicle.
When a junk car operation purchases your vehicle, what they’re really buying is the value of that scrap metal, by the ton. Steel, aluminum, copper and other metals can be sold for cash to scrap metal dealers. Those scrap metal dealers, in turn, sell the metal to manufacturers who recycle the metal and turn it into new cars, building materials, wire, smartphones and other items we use every day.
High Supply, Low Demand for Scrap Metal Bringing Down Scrap Car Prices Per Ton
The price for scrap metal varies based on demand. Right now, demand for scrap metal is low and supply is high. That means prices are low. In fact, the price of steel scrap has fallen drastically over the past few years. You can see the precipitous price drop in this chart:
Aluminum prices are also low, as you can see on this chart from InvestmentMine.com:
So why has the value of scrap metal plummeted over the years, especially when it was so lucrative in 2012 and then subsequent years of 2014 and 2015?
If car manufacturers aren’t making many cars, the price of steel and aluminum drops. If builders aren’t constructing new homes and apartment buildings, the price of metal also drops. But even when the US economy is doing well, there can be international factors that affect scrap metal prices. And that’s what is going on now.
A brief (recent) history of the international metal market
Metal is a commodity that is traded internationally. That means what’s happening in the world affects the prices. For years China’s economy was growing so rapidly it created high demand for steel, copper, aluminum and other metals. As its economy slowed from a sprint’s pace to a marathoner’s stride, demand for metals has also slowed.
However, that doesn’t mean China’s production of steel has slowed down. China has huge overcapacities in steelmaking, says Jan Pfeifer with InvestmentMine. “This steel has to go somewhere and now it is going into the world market, where it depresses prices.”
China produces both finished and semi-finished steel, says Nick Tolomeo with Platts, a leading global provider of energy and commodities information and benchmark price references. The semi-finished Chinese steel (also known as billet) is being sold on world markets for less than its cost of production. And that undercuts the market prices of the US scrap steel that has traditionally been purchased by massive steel mills in places like Turkey, which is the largest overseas buyer of our scrap. Now that Turkey is opting for Chinese billet, US scrap is left stranded on the east coast, unsold. Turkey’s steel production has also been negatively affected by social unrest within the country. This has created a glut of scrap metal, which has depressed prices.
The current state of steel prices has led to a series of depressing headlines as 2019 has rolled by:
- January 2019: Scrap prices drop up to $40 per ton
- May 2019: Mill buying prices drop $30 per ton
- June 2019: Scrap prices fall up to $32 per ton
- September 2019: Scrap prices fall up to $42 per ton
- October 2019: Scrap prices drop up to $44 per ton
Yes, there has been the occasional uptick or plateau, but the general price trend is definitely downward. The RMDAS Ferrous Scrap Price Index shows this disturbing trend. Shredded Scrap (#2) has gone from $367 per ton in December of 2018 to only $220 per ton in October of 2019. That’s a 40% drop and a loss of $147 per ton in just ten months!
And it’s not just steel that is suffering. Copper prices are at a three-year low, while aluminum is at a ten-year low!
Meanwhile, the Wall Street Journal has called junk car dealers “the latest victims of the commodities bust.” They interviewed several auto scrap yard owners who confirm they’ve gone from paying consumers $400 for the average car to between $50 and $100. The Institute for Scrap Recycling Industries notes that 50 scrap metals yards and recyclers have ceased operations altogether. Others have stopped selling cars and are simply stockpiling them until prices come back up.
Current Scrap Car Prices
Understanding Scrap Metal Prices
Scrap metal prices vary on a nearly daily basis. They even vary within different regions of the country. And obtaining accurate, up-to-date pricing can sometimes require a subscription service.
To give you some examples of scrap metal prices, we have pulled these numbers from Scrap Monster:
Steel - this is what the majority of your car is made of.
Aluminum - is used on various parts such as the engine, doors, hoods, and rims.
Copper - located throughout the vehicle, in the wiring.
Lead - Sometimes found on the wheels and in the battery.
Platinum & Palladium - located within the catalytic converter.
Why Are Scrap Metal Prices Constantly Changing?
There are so many factors that determine the value of scrap metal and which are ultimately the reasons for the fluctuating rates. Some of the major influences on the price of scrap metal in the US include:
- Market Price- how much are scrap commodities going for on the stock exchanges?
- Industry Demand– Is there presently a high demand for scrap metal? If so, which metals are most in demand? Industries such as technology, construction, and automotive can often use scrap metal. When the demand is high in these industries, the prices increase.
- Time– Believe it or not, seasons can also greatly affect when these industries are in demand for scrap metal. During certain seasons when metal is not in demand, the prices and value of scrap metal will drop.
How Often Can You Expect Prices to Change?
Now you know what key factors can directly influence the cost and value of scrap metal. But how often do these changes really happen?
Like gold and silver, scrap metal prices can change within the same day, often even several times. Have you ever tried to sell your junk car for cash? Were you told you’d receive a lesser amount than what you were originally quoted? If so, it could be due to the change in prices.
It is a lot more common to see scrap metal prices change weekly than daily. The changes are generally altered by a few cents per pound. Because of minimal price changes, many junk car buyers check scrap metal prices weekly and adjust their rates then. That is unless the change is drastic and will cause them to lose a lot of money.
Monthly changes in scrap metal are often the most common. They’re also the best sign for the scrap metal industry and car owners trying to sell junk cars for cash. Monthly changes are typically very small which symbolizes a strong and stable economy.
How to get the best scrap car price per ton for your automobile?
Given all of this, how do you scrap a car and get top dollar? Are you wondering - "How much is my car worth in scrap?" And is it possible to sell it for $500 still?
This largely depends on the type of car that you have and how much reusable metal that it offers to a junkyard.
For instance, if your junk car is a GMC Sierra, the average price is about $500. If you have a GMC Yukon, you might get about $600 for it. These are two of the vehicles that fetch the most for scrap metals, as they have a slew of reusable materials under their hood.
However, if your junk car is a Ford Contour or a Ford Escort, you'll be lucky to bank $90 for your scrap vehicle. As you can see, generally the larger your vehicle is (i.e. SUVs, trucks, vans), you'll net more for it than if it were small (i.e., compact sedan).
Selling an unwanted car to a salvage yard doesn’t happen to the average consumer very often, so the average individual has very little experience to rely on when determining the value of their junk car. Unlike the new or used car markets, there are no published prices for junk cars by make, model, year, or condition to go by, and nothing that says what a junk car should be worth.
Here's a look at some other tips for getting the most money for your junk car:
1. Familiarize Yourself With and Keep Track of Current Scrap Prices
If you’re going to sell your junk car for cash and you hope to get at least $500 or more, it’s best know some basics about current prices of scrap metal.
Though you may have to pay a moderate fee to obtain a subscription to a research outlet for this data, it may be worth it if you want to ensure you get the most money for your vehicle.
This could behoove you for a few reasons: One, it allows you to track scrap metal pricing to the day, permitting you to sell when the getting is good and avoid selling when the value is too low. Additionally, familiarizing yourself with scrap metal pricing can help you pick the season to sell your vehicle.
By keeping track of the most current rates, you can determine when you’ll get the most for your junk car.
List of Resources to Track Scrap Prices
There are plenty of resources you can use to keep track. Some are listed below:
- Use Phone Apps– There is a mobile app for just about anything these days. If you’re after the going rate for scrap metal, check out the iScrap App. This app allows you to look at scrap metal prices based on your location. You can review what other scrap yards are paying, so you can get the best deal.
- Check the Stock Market– If you invest in the stock market, you already have plenty of resources to use to determine the going rate for scrap metal in the US on any given day. Utilize those sources to look up the price for the type of metal you want to sell.
- Contact a Junk Car Buyer– When you’re trying to get the best rate possible, contact a junk car buyer. They can tell you what the going rates are for scrap metal. Often, they can give you an accurate assessment of how much you could potentially get for your junk car.
- Create a Spreadsheet– Say you don’t scrap metal often and visit junk car buyers or scrap yards infrequently. There are still ways to keep an eye on the pattern of scrap metal prices. Create a spreadsheet and make sure that it’s organized well. Write down the specific metals you’re interested in scrapping and the going rate. Try recording new information weekly, so that you can get a clear understanding on the pattern of price changes.
2. Don't Wait! - Waiting Only Makes Your Junk Car Less Valuable
Many people hesitate before selling their scrap cars because of the prices. They may think that they’d like to repair or restore their old car when they have more time or money. They would like to find a buyer that wants the car. They might consider stripping the car to get the maximum scrap value from each component. The car may be in bad shape but still runs, waiting to be used as a backup in case the household’s primary vehicle dies.
Whatever the reason you’re storing an unused car on your property, it’s important to understand that the longer you wait to send your car to the salvage yard, the less it’s going to be worth. That’s because many parts on a car that isn’t running deteriorate quickly, and the parts that deteriorate the fastest are usually the most valuable parts to a salvage yard.
When a car isn’t driven regularly, many of its formerly moving parts break down. Rust will appear and spread ever faster. Anything made of rubber like window gaskets, hoses, belts, and tires will become brittle and crack. All the fluids in the car will begin to settle out. Any gasoline left in the tank will absorb water from the air. If the car is left out in the weather, the seats will fade and crack. Animals and other pests can infest the car, and rodents will begin to chew on the wiring. Corrosion can degrade valuable parts like the starter motor and alternator until they’re only good for scrap.
Salvage yards will often offer you only the scrap value by weight if the car is inoperable and was left outside.
Tip: If you’re thinking of selling your unused car for junk, do it right away and tell the salvage yard that the car was on the road until recently – this will help you to get more for your junk car.
3. Make Sure you Get More if Your Car Is Drivable
To a salvage yard, a car in running condition is always worth more than one that isn’t. First off, a car that runs won’t require towing to get it to the salvage yard. Salvage yards tow cars all the time, but any savings of time and effort are worth some money to them, so it will factor into their scrap prices for cars.
Salvage yards also pay better scrap car prices if they can sell a vehicle at an auction. Not all cars bought by salvage yards are actually destined for the scrap heap. A car that's still in running condition is much more likely to be attractive to auction buyers and junk car buyers because of the possibility that they can be fixed up and sold. But unless your car is in exceptionally good shape, the salvage yard will probably sell it at auction as part of a group of cars. That spreads the risk for the auction buyer and seller, and that’s why you shouldn’t assume that just because your car is suitable for auction you could make a lot of money on it. You should, however, be able to get more than the minimum scrap value from the salvage yard.
4. Use the Blue Book Value as Your Starting Point
It’s easy and free to look up the resale value of your car if it were still running. But if you’re thinking of junking your car, don’t assume the salvage yard will pay anywhere near this price for your vehicle. The Blue Book value of a car assumes that it’s in good condition. If it were in the condition necessary to qualify for its maximum Blue Book condition, you wouldn’t be sending it to the salvage yard!
Even so, you can still use the Blue Book value as a rule of thumb to estimate whether the offer you’re receiving from the salvage yard is high enough. If you take your car’s potential Blue Book value, then subtract the cost of any repairs necessary to get it in sellable shape, you’ll have a rough guide to estimating what the car might be worth if it’s sold at auction or repaired and flipped by the salvage yard.
5. Know that Salvage Prices Are Higher Than Scrap Prices for Cars
Remember: the scrap metal price for a car does not take into account the valuable components still on the car. If your car has re-usable parts like an alternator, a starter motor, an expensive on-board GPS system, new tires, or anything else that is easily removed and resold, you should be able to get better than scrap steel prices for it. Keep in mind that all salvage operations involve labor for the scrapyard, and the risk and expense that comes with keeping inventory on hand. Because of this, don’t expect salvage yards to give you the full value of parts they sell. But you may be able to negotiate for up to half the value of the easily re-sold components.
6. Use the Weight of Your Car as a Last Resort
When all else fails, you can use your vehicle’s curb weight as a guesstimate for its value as scrap metal. The majority of the weight in your car is composed of steel. It’s fairly easy to determine the value of scrap steel at local metal recycling yards. Prices of around $240 to $299 per ton are common, so your average car is usually worth around $100 to $400 to an auto junkyard in 2020. If you’re being offered scrap prices for a car that has the potential for salvaged parts or even an auction sale, you should negotiate further with the salvage yard, or look for additional quotes.
7. Shop Around and Never Accept a Price with Conditions
Set a value when junking your car and stick to it. Then it’s smart to get as many quotes as possible, so you can select the best price before making your decision.
Pick up the phone and call a few different lots near you. Simply give them the model, make and year of your vehicle and see what they say about an estimated payout. Simply ask them, “How much is a junk car worth?”
Be on the lookout for one technique used by unscrupulous salvage yards: The Bait and Switch.
Some junkyards have been known to give you a conditional price based on your description, and say they’ll inspect the car when they arrive to pick it up with their wrecker. Once the car is on the truck, they offer you a much lower figure than you agreed upon on the phone. All the pressure is on you to agree, because the car is already on their truck.
Don’t worry about missing out on a few more dollars if they ask to inspect your car first. Give the salvage yard a detailed description of your car and its condition up front and accompany it with digital pictures if necessary. Ask for a firm scrap car price, and then make them stick to it.
8. Follow Up Regularly
Are you already tracking scrap metal prices? Have you been in contact with junkyards near you? If you haven’t pulled the trigger yet on unloading your junk car because you haven’t liked what you can make off it, don’t just give up on things.
Like we noted in the above section, scrap metal prices were high just a few years ago, dipped, then made another little rebound. There are highs and lows to these types of things, so just because your estimated payout is low today, that doesn’t mean that it will be low tomorrow.
Be sure you’re regularly checking scrap prices and following up with junkyards to help you determine when you can maximize on the payout of your junk vehicle.
Get your online quote by calling (855) 437-9728 or filling out the form on our website!
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