There comes a time when you need to get rid of your vehicle. Yet selling a car, motorcycle, or van can be stressful and time-consuming. An old vehicle can sit on your driveway for years, taking up space and looking unsightly. And then there’s the expense of placing ads, waiting for a response and the charade of passing ownership. Car removals are a great way to free up your space quickly.
Additionally, you might not make any money and selling a car might actually cost more than it is worth. As an alternative, you might consider scrapping your vehicle rather than selling it on the open market. Scrapping is easy. But there are some things you need to consider, such as how to prepare your car for scrap and how much you are likely to get as cash value for the materials.
Scrapping Over Selling
The value of a vehicle depreciates pretty quickly. The moment you drive your new pride and joy from the dealership, it begins to lose monetary weight. In almost all cases, a brand new car will lose 40% of its value in the first year and 10% per year after that. So by the third year is over, a new car is worth 60% less than you paid. With average ownership of around 11 years, your car is virtually worthless by the time you look to sell.
Additionally, selling a vehicle can be a tedious process and one that is likely to cost you more money than your car is worth. Unless your car is worth a significant amount, scrapping might be a better option than selling. Selling a car takes time, and you won’t get the best price. Scrapping, however, is based on the raw materials of your vehicle and doesn’t cost you a penny. In fact, you are guaranteed to make money even on a car that is worthless on the market.
Preparing Your Car for Scrap
Before scrapping your car, you need to prepare it before taking it to the junkyard or ordering a junk car removal service. First, remove all personal items from the vehicle. Such things as identification or anything with your address can be used for ID fraud. Don’t leave these lying around. Additionally, you are required to remove specific materials from the vehicle before you tow it or pass ownership to the junkyard.
Materials to remove include headlights, tail lights and mirrors. You can leave these on the car, but it might reduce how much you will get for the scrap since the workers at the yard will need to do this themselves. Like most valuable materials, the value of scrap metal fluctuates all the time. Therefore, the final amount you get is determined by market conditions. However, the materials of newer cars are typically worth a little more in monetary value.
How to Determine the Scrap Value
The salvage value of your vehicle is significantly less than what you paid for it. The deal is determined by the value of materials after the vehicle is deemed useless for driving or as a potential resale. For example, a 20-year-old BMW M3 with 200,000 miles on the clock isn’t worth anything in terms of sale and is therefore deemed useless and unlikely to sell.
Also, a brand new BMW M3 that has been totalled and therefore written off following a collision is also deemed useless. Thus, both cars are subject to scrap value only. Scrap value is determined by applying depreciation over its lifetime. The calculation is as follows:
Scrap Value = Cost of Asset – (Useful life in years * Depreciation)
Therefore, you can work out the potential value of a vehicle in scrap. For example:
New Car ($15,000) – (8 years * 10% per year) or 20% of 15,000 = 3,000. So the scrap price of an 8-year-old car that cost £15,000 with a 10% annual depreciation is likely to be $3,000.
However, rates are subject to wild fluctuation. According to current prices, the offer you get for a car of any age and value will be higher or lower and you may be subject to tax.
While current prices ultimately determine the scrap price, you can get a little extra money by playing a good game:
- You can monitor the market until such time you are likely to get a good deal on materials.
- You should check for salvageable materials in the car. These materials include new tires, the car starter and seats.
- Clean the interiors before car removal or scrapping as they might be saleable.
You may be able to sell extra parts for more money.
