When a vehicle is damaged beyond repair, automobile insurance companies declare it a total loss. While it may not be cost-effective to repair the vehicle, it does still have some value as salvage. In addition to the value of its scrap metal, the vehicle may have some serviceable parts that can be removed and sold separately as repair parts for other vehicles.
You will need to do some investigative work to determine a ballpark figure for what your junk car is worth, and there are other things to do in preparation for scrapping your vehicle.
Let’s begin by determining the value of your car.
How do I determine the value of my car?
Do some research, not only to figure out how much your car is worth but also how much people will pay for it. Take inventory of the vehicle. A junk vehicle is one that is damaged beyond repair, so likely you will be selling it for scrap metal, which is usually sold by the ton. However, you’ll want to determine if there are any valuable parts to your car, like a GPS system, stereo system, starter, or alternator, that will add to the value of your car, or that you can remove and sell yourself.
The salvage value of an automobile will vary depending on the state as well as the year, make, model and condition of the car. Here’s a guide on how to calculate it:
- Look up the retail and wholesale value of a similar vehicle using resources like the Kelley Blue Book and National Automobile Dealers Association Used Car Guide.
- Add these two figures together and divide the sum by two to get the car’s current market value.
- Contact your insurance company for the percentage of market value that it uses for determining salvage value. Although the percentage can vary, it is typically 75% of the market value.
- Multiply the car’s current market value determined earlier by 0.25 (1.00 minus 0.75) to find its salvage value.
- The result of this calculation will always be lower than the current market value of the car. If the cost of repairs exceeds this amount, the car is written off as a loss.
If your car is either one-of-a-kind or still commonly in use, or if the demand for its parts is high, that car will be valued more highly. Again, using the Kelley Blue Book value as a starting point, you can subtract the cost of repairs necessary to get it back into running shape. It won’t be worth that much, but it will give you a rough idea.
As a last resort, you can use the weight of the car to estimate the price you will get. The typical price per ton is somewhere between $240 and $299, so your average car is usually worth anywhere between $100 and $400 to an auto junkyard.
What should you do before scrapping your junk car?
Here are some things to consider before scrapping your vehicle:Have the title to your car ready. When you transfer ownership over to the junkyard, you will be signing the title over to them. Otherwise, you will still technically own the car and will be responsible for it, even though it’s no longer in your possession. If you’re trying to get rid of your junk car without a title, go to the Department of Motor Vehicles (DMV) and get it replaced. And while you’re there…
Know the legal requirements in your state. Check with your local DMV office or online to get an idea of the specifics that go into the process of selling your junk car, as they vary from state to state.
Know your options. Call around to salvage yards and junkyards in your area. Be ready to give them accurate details about the car, including any damage or missing parts, so that they can give you an accurate quote of how much they’ll pay you for it. List all the quotes you’re given so that you can compare your options. The prices won’t vary by much, and dealers will always offer you the lowest possible price, so be prepared to negotiate. Find out if they will pay you more if you tow or drive the vehicle in yourself. If the car is still operable, the fact alone may help increase its value, as a yard may be able to sell the vehicle at an auction.
Know what the dealer expects from you. Some dealers want to buy a stripped-down vehicle, which includes removing all non-metal components. That means scraping off all plastic, removing seats, and emptying fluids.
Confirm that the dealer is properly licensed. It is important to work with a reputable dealer with an active license so that you are protected from possible liabilities in the future. For example, if the dealer fails to pay you as agreed, you may be unable to make a valid claim against them. You could also be sued for improper transfer of a motor vehicle, so take the time to confirm the dealer is legitimate.
Prepare the vehicle. Go through your car thoroughly and remove all personal items. Look in the glove box, trunk, seat pockets, under the seats, and behind the sun visors.
Remove the license plates. This is a requirement in many states, and when you apply to cancel the title for the car, the DMV will ask you for the plates.
Remove any valuable parts or components. Unless otherwise negotiated with the junkyard dealer, you can remove any valuable parts or components to sell separately, such as entertainment systems, GPS systems, starter motors, and alternators. If your battery and tires are in good condition, you can remove them, too, although you should replace the tires with old ones so that the vehicle can be towed. If there is a lot of gas in the tank, you may want to siphon it out and either put it into another car or store it in tight containers away from heat sources.
Ensure the weight scale is certified. Not all dealers use accurate weight scales, so it’s helpful knowing the weight of your car to ensure that you get paid the correct amount.
Final Thoughts As you can see, there are several steps to go through in order to properly sell your vehicle to a junkyard. However, it is worth familiarizing yourself with each one to ensure a safe, legal, and profitable transaction.