The COVID-19 pandemic changed the world a lot. From the inflation, to telehealth services, to mask mandates and restrictions, to remote work becoming the norm, people have had to adapt to a new way of living.
The pandemic shook every business and the automotive industry was not left untouched by the pandemic’s wrath. When the pandemic hit and the world went into lockdown, vehicle dealerships had to do the same. People were left without being able to buy a new vehicle, so they turned to used and pre-owned vehicles instead. This caused businesses to suffer from economic declines. It was a dark time for everyone but since then things have started to return to normal, if only slightly.
Of course, there are still aftereffects of what the pandemic did to us. This includes the fact that the value of junk cars has increased significantly during the last year or so. If you are one of the people who have been holding onto their junk vehicle for whatever reason, now is the time to sell as cash for cars is at an all-time high.
The price of scrap metal, including that of junk vehicles, has increased due to a number of things. One such thing is the fact that, at the beginning of the pandemic, factories that manufactured auto parts had to shut down while implementing new safety protocols. This resulted in the supply of parts diminishing. We’re still feeling the effects of this today, which is why junk car prices are so high.
People were aware, too, of the effects that the pandemic would have on the economy, so they weren’t too eager to make big purchases like vehicles. During this time, vehicle sales for new cars were down to 15%.
The biggest factor when it comes to the value of junk cars increasing has to do with many factories in north Asia being shut down. These factories dealt in aftermarket parts and without these factories in business, the supply chain took a hit.
Fortunately, it didn’t last long and things bounced back up for the automotive industry. Business owners realized the importance of sourcing recycled parts locally instead of buying them from foreign markets. This helped both environmentally and financially.
In May 2020, in the heart of the pandemic, the price for junk cars grew considerably. Prices are still high today, too, though it is uncertain what they may be in a month from now as the market is vastly unpredictable.
However, the fact that junk cars are selling for a lot right now is good news for those with inoperable or totaled cars just sitting around in their yards, driveways, or garages.
You may be asking: why are junk cars selling for so much now?
Unfortunately, we are still seeing global shortages when it comes to things like precious metal and microchips, both of which are important parts to manufacturing new cars. According to Cashforcars.io, metal is used to produce essential parts such as the catalytic converter, one of the most valuable parts in any used vehicle. Microchips, on the other hand, have been implemented in most modern-day cars. Usually, a few dozen are put into newer cars to control everything from the window motors to the navigation systems.
Without good production of both metal and microchips, the automotive industry, at least where it concerns newer vehicles, have had to slow and even stop production of new models. Thus, the new models sold at dealerships are often overpriced.
This has caused consumers to shop for used and pre-owned vehicles instead. E-commerce, specifically, has aided the auto-recycling industry to outdo other markets. You can buy and sell pretty much anything online nowadays and that includes cars. With people stuck at home during the pandemic, they soon turned to shopping online for used vehicles. As such, there are many marketplaces and websites online that are now specifically used for selling junk vehicles.
With so much competition now between these websites and people buying pre-owned vehicles, junkyards have had to increase the prices they offer for junk vehicles.
Additionally, the automotive market is all intertwined. When prices of new cars go up, prices of used cars also go up, and then the value of junk cars also increase. Since new cars are not being made like they used to, their prices have grown, which has caused the value of all other vehicles to climb as well.
A few years ago, it was common for junkyards to offer $200 to $300 for junk cars. Nowadays, however, it’s more likely for them to offer $600 to $800, especially if your car still has a catalytic converter.
Of course, the stealing of auto parts has seen a surge, too. Thieves aren’t blind, they know that the prices for auto parts are high and they’re looking to make a quick buck or two. They know what they’re doing and it’s easy enough for them to wiggle their way underneath the junk car left in someone’s yard to steal the catalytic converter from it and then turn around and sell it for a nice profit. In 2020 alone, auto thefts saw an increase of 9.2% from what they were in 2019 and it has gotten even worse now into 2022.
So, between shortages of metals and microchips, the competition of online automotive marketplaces, and catalytic converters being stolen right from the owner’s property, it is no wonder the value of junk cars have increased so substantially.
How long the increase in value remains is unknown. Since the market is so volatile and is always changing, what is worth $800 dollars now may be worth $300 dollars in a few months.
If you are one of those people who have had a junk car sitting in their yard for a while because you haven’t found the time or energy to sell it, you shouldn’t wait any longer. Take advantage of the market as it is right now before it comes crashing down.
