What Happens To An Auto Wreck?

Tweet

You are heading through an intersection when some drunk runs a red light and plows violently into the passenger side of your car, wrenching it into a big twisted V. You are unhurt, but your auto, with only 11,000 miles on it, is totaled. You make amends with your insurance company and purchase a new car. But what happens to your wreck?

It finds its way to a recycler. According to a recent survey of dismantlers, more than half of the 8 million motor vehicles annually entering their yards are purchased from insurance companies. The survey, conducted by Arthur D. Little Inc. and the Automotive Dismantlers and Recyclers Association (ADRA), placed the median purchase price of such wrecks at $330. The cars are bought either by sealed bids, through contracts with insurance companies, or, most commonly, by auction at salvage pools. Wrecks typically command 20% to 30% of book value for an undamaged vehicle.

The point is, the majority of vehicles purchased by auto dismantlers aren't rusted out jalopies whose odometers rolled over eons ago. Most are late-model cars, perhaps, as in the example, with only a few thousand miles on them. Away from the point of impact plenty of perfectly good parts can be recycled.

The astronomical prices of new replacement parts produces a ready market. Barry Isenberg, consultant on automotive salvage, explains: "Right now, if you were to go to a new car dealer and purchase one by one all the parts necessary to build the typical $10,000 car, it would cost you in the neighborhood of $70,000 to $80,000. Take that same car, purchased at an insurance auction for, say, $2,000. Perhaps a third of its parts are good. If you sold every nut and bolt, you'd make about $25,000. Now nobody does that, of course. What they do is double their money and sell about $4,000 in parts. Surely, there's at least $20,000 there. Under most present operations only a very small percentage of what's available is ever sold."

What is sold typically goes for about one-third to one-half the price of new. That price differential, now much more publicly known, and the dramatically improved appearance of many salvage operations have combined to raise the retail trade from an almost immeasurable level not many years ago to better than 27% of yard business industrywide, according to the ADRA survey. (Some progressive yards now boast of more than 50% retail sales.) Go to All Auto Parts in North Hollywood, Calif., for instance, and owner Ed Milmeister will sell you a power-steering gear for a 1981 Toyota Cressida for $150. New, the part would cost $570. A wheel for a Datsun 280 Z-X will run you $85. New, it goes for $1G6.

In many instances, used parts are not only considerably less expensive, but they also arrive faster. New parts from Detroit may take weeks to make it to your local dealer or body shop. With luck, a used part can be located the same day. Furthermore, a used door comes already assembled. New, from Nissan, you can't buy an assembled door, says Milmeister. You get the shell for that 280 Z-X for $412, and then you have to purchase and install the requisite parts: a molding -- $46; glass -- $81; mirror -- $47; electric window motor -- $109; and more. All told the new door runs to more than $1,000 plus labor changes; Milmeister will sell you a used door for $500 complete.

What about the stigma of used parts? Good recyclers bench test most mechanical and electrical equipment; in part, because good recyclers offer warranties and don't want returns, and also because they want repeat customers. All parts, the industry insists, are "road tested." Translation: In the case of wrecks, they were functional when the car was totaled. Barry Isenberg, for one, puts stock in those words. "Assuming you buy a used replacement part from a car with the same mileage as yours, then it's likely to be no worse off than the one you had. In fact," he continues, "it may well be better and safer. Take a three-year-old brake drum with 40,000 miles on it. A recycler took that off, sized it with a micrometer and looked to see that it wasn't scored. . . . I'd say that brake drum is probably better than the one on your car right now that no one has looked at recently and that could very well be cracked or scored."

What about the preacher? Does he practice in accordance with his words? Has Isenberg ever purchased a used part for his Porsche? Well, no, he admits. But looking under the hood a while ago, he discovered what many car owners never realize: an unauthorized, everyday repair with used, not new, replacement parts -- and at new prices. The important point, says Isenberg, is that he has had absolutely no problems with the used fuel pump.