Selling a car for parts

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  #1  
Old 03-21-07, 12:13 PM
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Selling a car for parts

I have a '96 4.0L Jeep Cherokee Sport 2wd that is not running and have decided to sell it for parts. The body is in great condition, no rust or dents, relatively new tires and the interior is in good shape, no tears in seats. It doesn't start because I suspect it needs a new flywheel (recently changed starter and battery). At this point I just want someone to come get it and take it off my hands. My question is does anyone have any suggestions as far as how much I should ask for it when selling it for parts to an auto wrecker? The kbb value is around 2300.
Any feedback is appreciated.
 
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  #2  
Old 03-21-07, 12:49 PM
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kbb doesn't enter into a "junker " it would bring 75-125 around here .

wreckers doesn't ask what you want they tell you what they will pay

I would try for a private party sale first , maybe trey for 500 -600
 
  #3  
Old 03-21-07, 04:11 PM
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Or be a nice guy (not that you aren't anyway ) and donate it; there are a number of charities that would be glad to have it: Habitat for Humanity, Salvation Army, and several veteran's groups just to name a few.

=====================================
Following is courtesy of RecyclerMike; we had an administrative problem and had to move his post:

"As an Auto Recycler in the Dallas/Ft.Worth TX market, I can provide you with some insight here.

The short answer is: It depends on the recycler and your region. And with a bad engine, I'm guessing between $300-500.

It's a bit long winded, but here's the explanation:

What you see as the family automobile, I view as a collection of parts that I can add to my inventory. When calculating the bid for the car/truck, I not only take into consideration what I can sell the part(s) for, but my likelihood of selling that part quickly. In other words, demand.

(lol, my Economics 101 prof would be proud of me.. I actually listened!)

Like many used commodities, a the value for a vehicle is set by the buyer based upon his need (demand) for the sellable items on your vehicle. When he has a high demand for a particular item, a "large" value can be assigned to that item. But when he has low or no action on a part, he is smart to assign no dollars to that part when computing the bid.

Bids are often computed on just 4 (or maybe 5) part types: Engine, Transmission, Wheels, and Front End Collision parts. This is due to these 4 items being what sells the fastest and is in the highest demand. If one or more are damaged and cannot be sold, then it significantly lowers the bid. Likewise, if the one or more of these items has very low or little sales activity, the recycler cannot afford to use it in the bid.

So what the vehicle is worth to one particular recycler can easily be more or less than the next one, even if the facility is located next door.

To give you an example: Since many folks still own and drive a 1996-1999 Chevrolet 1500 series truck, both the drivetrain and collission parts are good sellers at my store. Therefore if the truck you are selling to me is low to medium miles for the age, I can offer a pretty fair bid, even if it is wrecked.

However, since I have very low activity (meaning I don't get many calls or sales) on Hyundai vehicles, I will offer significantly less for this type of vehicle compared to the Chevy truck above. But my neighbor down the road who does almost all Asian imports does very well on Hyundai's.

Essentially it's like many businesses that sell products: you're "winning" the game the faster you get the money back that you spent on inventory (the vehicle). In general, recyclers desire to get their money back in 90 days or less so we can use it again.

Also, a recycler takes into consideration the cost of actually processing the vehicle in the form of how much overhead each vehicle carries. This includes all the overhead items like rent, payroll, utilities, phone bills, etc. To give you perspective, it's not unusual for a recycler to "pay" $1200 to 1600 per car in "soft costs" just to keep the door open.

So, to make any money in this business, we have to not only recoup what we paid you for your Cherokee, but these soft costs as well. And if I don't keep this in mind, I'm just circling around the drain. (Fortunately I work hard at watching my numbers to ensure constant improvement and growth )

Next, most recyclers realize the greatest amount of revenue on older vehicles (6+ years and older from current model year) from the engine. At our facility, engine sales represent about 28% of total revenue, with transmissions a close second at 21%. So in just two types of parts, I am get nearly half my revenu dollars. I do sell sheet metal goods to body shops and insurance repairers, but it take several parts combined to make up the selling power of just the engine.

On an older vehicle, a bad engine will reduce what I want to spend as fast as a damaged front end does on a 2003 to 2007 vehicle. That's where the main money is, and as you described, it's not something the recycler can sell. And unless the recycler has strong action on the transmission, he is smart not to put a large investment into the Cherokee as inventory.

As I said, this was a bit long winded, but now perhaps you'll have a better understanding when you get offered between $200 to $500 for the vehicle. If you have any questions, feel free to post or send me mail.

--Mike

"I forgot to add an alternative idea --

Take a few good photos of the vehicle, make up a nice flyer with information about the vehicle and approach some of the various used car lots in your area. Tell them that the vehicle needs repair, but because of this, you want significantly less than if the vehicle was in running condition (say $1000?).

Make sure your asking price is low enough so that they can afford to repair the vehicle before putting it out on their lot.

A second idea is to leave the flyer with them and tell them that you are willing to pay them a 10% "finder's fee" if they hook you up with a buyer who is willing to pay more than $1100. You'd be suprise how this improves their memory when they see than can pocket a C-note by just give your phone number or flyer to an interested buyer.

Finally, take out an ad in the local Auto Trader magazine. Be honest in your description and provide yourself some haggle room (like "$1600 obo"). You might find a private individual who is willing to repair the vehicle for their son or daughter to drive as a first vehicle."

--Mike
 

Last edited by the_tow_guy; 03-22-07 at 04:21 AM.
  #4  
Old 03-22-07, 01:35 AM
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Smile

Thank you so much for the feedback. I am new to this whole forum thing and I am amazed how strangers take the time to help each other out - it's a beautiful thing. Anyway, I thought about donation but unfortunately I really could use the money right now and if I donated it, it would not be a tax deduction for me because my itemized deductions would not exceed the standard deduction.

Mike, thank you especially for your inside perspective. I gained valuable understanding and insight into the whole process. I also very much appreciate the alternatives you suggested which I will definitely consider.

Again, thank you all for your feedback.
 
  #5  
Old 03-23-07, 07:23 AM
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Thumbs up

TowGuy - That was a very informative discussion of the economics of the auto salvage business. It pointed out a lot of things which I had never considered previously. Thanks for a great post.
 
  #6  
Old 03-23-07, 07:34 PM
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Thanks for the kudos, but I wasn't the author, as noted. We had to move that portion of the thread because of a problem with a member's account. As soon as we get him squared away, I'll chop and paste it to him so he gets the by-line.
 
  #7  
Old 04-01-07, 08:31 AM
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Also depends on your area.

FWIW, I paid $1700 for my 97 sport from a dealer almost 3 years ago, good condition, no repairs needed, even the a/c worked. If I were looking for a parts jeep, I might go $300 (and could use a transmission now).

Recyclers here only pay about $50 for the average car, maybe a little more if it is in high demand.

You can see where $2200 might seem high for one that you can't even drive away.
 
  #8  
Old 04-20-07, 10:01 AM
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Love the two door Cherokees

Love the two door Cherokees, I have two, where are you located????
 
  #9  
Old 04-21-07, 07:10 AM
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Unhappy Sorry 2wd Not 2 Door

Sorry I had not noticed that it is 2WD (you can not even give them away in PA) not a two door
 
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