Some people seem to think that they’re in for a windfall of money when they inquire about Cash For Clunkers. After all, many used cars are worth thousands of dollars, so it should be logical to expect that some of that value is still there, right? And many scrap car company advertisements seem to give this impression. But the truth of the matter is that you won’t really get rich from a junk car company when you decide to finally turn in your dilapidated car.
A scrap car company is a business, and like any business they expect to turn a profit. But they’re not really getting much from your car, so you can’t expect to get much either. Below are some facts you need to consider.
Facts About Cash For Clunkers
• Scrap steel prices have fallen. Junk cars have lots of steel parts. You’ll find them in the roof and frame, and in the safety belts and door latches. Every year, junk cars produce about 18 million tons. It was only a couple of years ago at the start of 2014 when scrap steel was worth $400 a ton. By late 2015 it was down to about $235 a ton. Now at the start of 2016, scrap yards are buying them at about $50 to $70 a ton.
It’s not a conspiracy among junk car companies out to fleece you. The low prices are due to lower demand from overseas because the Chinese economy is slowing down and because the strong dollar has made scrap steel so expensive for other nations to buy. And then there’s an excess supply of iron ore, which steel companies can use instead of scrap steel. All these factors have contributed to a steep drop in scrap steel prices.
• Catalytic converters. Catalytic converters can be very valuable, because they contain rare and precious metals, such as rhodium, palladium, and platinum. These metals can be used for a wide variety of niches outside the automotive industry. Once upon a time, scrap yards were paying $100 to even $300 dollars for one of these parts. After all, the platinum they brought in was worth almost a thousand dollars an ounce. This explains why just recently there have been a string of catalytic converter thefts across parts of the country.
These thieves haven’t done their homework, because scrap metal (not just steel) is low all across the board in early 2016. According to law enforcement officials and scrap yard representatives, right now is a very bad time to sell used catalytic converters. Scrap companies are paying the lowest prices in recent history for them.
• Batteries. Some people think these can be valuable too, and in fact battery thefts have been known to happen. But in general, you can expect only $5 to $10 for each one.
So add them all together, and it doesn’t seem like much right? But that’s not the proper perspective to take. You don’t only get some cash for clunkers—you get rid of a huge problem and a drain on your resources, and that’s a benefit that’s worth a lot more money than you think!