Business Vehicles At Auction
In the UK you have to treat business vehicles different to say privately owned ones as often theu are liable to VAT charges. When we say business vehicles we don’t mean vans or lorries such like but normal cars that have been used for the purpose of benefiting a business. An example is a small Citroen car that came to auction that used to belong to a driving instructor training school and had a bump (not a good advert). Normally this car would be the value of the fianl hammer, but because this was business owned for no private use and the owner of the business claimed VAT off the purchase, the car went to auction as final price plus VAT, even though it was salvage. Not sure how this works in other countries but it is very important to cover your tracks here.
This could be especially important when buying a car that even though damaged is not registered as a salvage car. Sometimes this is because the company underwrote any insurance claims up to a certain point and it is the vehicle owner who is selling the car, not the insurance company.
This ex driving instructor training school vehicle had only done 20,000 miles but cost the new owner 15% more thyan he bargained, as he was not prepared and did not do his homework.
USA Export Salvage
Much of the salvage that goes though the USA auto salvage auction system cannot be given a new title so therefore either finds itself scrapped for auto parts or sold to other countries where it has its own way of testing cars and often shows no history except that the car was previously regitered abroad.
There is a good and bad sode to this type of business , exporting salvage. The good side is that some makes and models are much more expensive outside of the USA, which means they do become cost effective to repair, where in the USA they could be deemed as non repairable. Certain German models for instance can be cost effective to export from teh USA repair to a good standard pass the local roadworthiness test and everything be good business. This is also applicable to the breaker market also, as the parts on these cars can also be worth a lot more in other countries.
The bad side of this business is where non roadworthy cars are exported ot countries who do not have the safetry standards in place they do in the USA or say the UK. Certain countries could export a a salvage car from the States which is just unsafe and non roadworthy and bodge up the based stuff and then take a dangerous car on the road.
A new company that is deciding to help foriegners buy salvage cars from the states is Salvagesparefinder that also does UK salvage. They now have become a broker for Coparts and let people buy usa salvage without any dealers licence
Business Vehicles At Auto Auctions
For the most part the cars that turn up at salvage auto auctions are from normal people going about their normal business before being involved in an accident, the insurance pays out and so the car ends up at a salvage auction. But inevitably cars associated with businesses appear and if they are not being sold by the insurance company because the owner underwrote the policy themselves, then the cars sometimes have VAT to pay on them.
Such businesses could include taxis, driving schools and even cars used for driving instructor training are presenting wrecked vehicles now and again. It is important to take car with these cars. In one case they are probably better maintained than the average car, but in another they have probably done more mileage and been knocked around a bit.
If the car has been well maintained the mechanics may be fine, but you should also look for wear and tear in the interior and such things like switches and electrics that may have been abused. Also look for resprays, as many of these vehicles may have been a different colour before being sprayed to match company branding.
How Excavators Become Salvage
As we have mentioned before salvage is not just about cars and vans, but also excavators, diggers driven with steel and rubbers tracks. As these machines are built to withstand the toughest of conditions questions are often asked, how do these tracked vehicles become salvage and end up in auctions around the world?
Well we have some footage that will help explain this. Talk about a lack of health and safety, this excavator is sitting on an edge of a building site trying to know down a building, watch what happens next and you will get a clear idea of how these vehicles end up in auction with some damage to them. In many cases these building companies claim on their insurance to get a new excavator or relevant steel or rubber tracked vehicle.
Its Been Confirmed Cars Are More Expensive
We mentioned this a few posts ago that the recession may send the prices of cars up with the lack of vehicles against the demand. Well it now has been confirmed by CAPS the company that publishes trade car price, stating that your car is increasing in value even whilst it is standing on the drive. Some vehicles that were extremely unpopular just 12 months ago, have increased in value the most with some 4×4’s increasing in value over £3000, not a small amount. This obviously has been compounded by the low prices last year.
This obviously affects the salvage market, as clearly more profit can be made from each car repaired. Many who have been used to really cheap salvage prices at auction now have to recalculate their actual costs against profit, with some just not wanting to pay more for cars. You tend to get used to prices dropping but not increasing. In fact this is the first time since records began that second hand cars have increased in value, except for some classic cars, or supercars.
Of course a pending question is how long will these high prices stay with us. For example it takes time to repair a salvage car, in this time is it possible that prices could drop back to normal levels again.
The Price Of Rubber Tracks
Running a salvage yard is expensive and you often need heavy machinery to move vehicle around. If you are luck enough ot have hard surfaces throughout then the typical large forklift can handle most things, but on uneven ground then something with rubber tracks is likely to be safer. The downside is they tend to move much slower, so from a productivity side of things they are not always the best options. But from a piont that you can buy new rubber tracks as and when you need them, does help.
But don’t be fooled these rubber tracks are not always cheap and as a salvage yard we know bought a tracked machine from auction only to find the rubber tracks he needed was so expensive he had paid too much for the excavator. Should have jut bought one second hand with the rubber tracks already in place.
So they live and learn, but then come the different options of rubber tracks, and the difference in price they all charge. Of course every supplier states that their product is the best and will last the longest time etc, etc. Easy for a professional to say, but difficult for salvage yards who business is auto auctions not heavy machinery. One place to get good advice is from Mini Max Parts for smaller rubber tracks, they gave good advice and a good price. I known it is an advert, but they did help.
Recession End Knocking prices Of Cars Up
All the figures show pretty much worldwide that there has been growth in many economies and even though we are not likely to get back to normal for a while, things seem to be improving. When this type of news occurs, then consumer confidence rises and this may be a factor to why many vehicles at auctions are going higher in price than expected.
There are many customers leaving pre bid amounts at the salvage auctions only to find vehicles seem to be realising higher prices. It also could be many have delayed any big purchase for so long now, that when even a glimpse of an improvement in the economy send prices higher.
We have noticed in the UK a shortage of salvage cars for sale, probably due to the holiday period where cars have been delayed from auction until sufficient staff are back into the salvage yards to service the sales and quantity of cars.
The new car market has only seen a very small increase in new sales, as it is difficult to measure if the scrappage scheme is working, as the growth experienced in Germany has just not happened over here. Anyway, if you are after a bargain, get out your glasses guide and recheck you prices, just to make sure you can buy as much as you could 6 months ago.
Junk Yards Need Excavators
Obviously salvage cars and auctions need heavy machinery to move vehicles or even strip the vehicles for car parts or crushing. Here we can see an example of a Komatsu excavator being used to clear away old car parts from a scrap yard. These machines can save a huge amount of time and resource getting those heavy jobs done. Ironically getting undercarriage parts for these machines can be harder than the car parts they are stripping and moving. There are new excavator part suppliers out there but beware as prices can vary based on genuine parts and copies.
These machines to buy are often very expensive too with a long working lifespan, so even second hand ones will raise a good premium and as we have seen in recent salvage auctions, some of the wear parts associated with excavators are well in demand. Anyway here is the junk yard video.
Wear Parts
You have heard us talk about the excavators on sale as salvage lots bit recently there seems to be a lot of wear parts available too. Instead of buying the full vehicles in one go, there seems to be a market for second hand wear parts from these salvage vehicles that have found their way into salvage auctions.
I suppose these auction sites and yards need to get their money from any source available and one thing is for sure there certainly is a market for used wear parts, probably because of the value new. One wonders whether they find themselves going straight onto an excavator or whether there is some more margins being applied as these wear parts are sold on again.
The trucks that are required to transport these large items around is also impressive, although again there must be some involved in the shipping back to the warehouses where these parts will be stored. I very much doubt these wear parts will be left outside for the world to have access to.
There wee suggestions that maybe dedicated auctions should be put together consisting of wear parts and all excavator spares including rubber tracks which have a limited lifespan. Hey if it save money, we are all for it, after all that is what salvage auctions are for.
Where Have All the Cars Gone
The breakeryard industry in the UK are all complaining about the new scrappage scheme, suggesting that it is difficult to get hold of car parts for older cars now that owners are preferring to trade them in for a new car than get £100 down the scrap yard. The problem is the argument does not add up, because just as older cars are no longer available for parts, so the number of older cars on the road has reduced and therefore demand has gone. There is also an argument that states, why replace parts on a car you are just going to scrap anyway.
But funny enough this debate has also spread into the salvage market, blaming this scheme on the low availability of salvage cars. We just don’t understand what the fuss is about, how can cars of 10 years or older affect the salvage market which is normally based on much newer vehicles. Lets be honest, most salvage cars bought are under the 10 year mark, and otherwise it is just not cost effective. So where have all the cars gone?
Maybe our driving has improved and we no longer crash these cars, or maybe the insurance companies are repairing more themselves now. Who knows, we certainly don’t. What we do know is that in certain areas in the UK there is a shortage of good salvage deals going at the right price.