Scrappage scheme boom time for salvage breaker

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Sum of the parts equals more than the car.
Auto Express recently ran an article looking into the value of a car as parts. With the Government scrappage scheme making more people scrap perfectly usable cars, breakers like 247 spares are being flooded with good quality parts which can be sold on for a premium.

I’d already covered a similar topic back in October 08 on breaking rather than repairing, which even then was looking to be far more profitable in many circumstances.

Article extract – Source: Auto Express issue 1,073.

Under the scrappage scheme, the buyer has to essentially sign the death warrant on their current car before they can get the keys to the discounted one. And we’ve head many tales of dealers accepting completely functional Porsches, fully serviced Civics and pristine Micras.

To qualify for the governments promised share of £2000 discount the motor has to be taken to one of 1,400 Automotive Treatment Facilities (ATFs) around the country and issues with a Certificate of destruction (COD). Up to the end of June 2009, 29,796 cars had either been destroyed or were on the chopping block thanks to the scheme.

But the COD is a bit of a red herring because although the car can no longer exist, the cars can and often will be harvested for resale. “The vehicle has got to be scrapped for the COD, yet the ATF is at liberty to take off any parts” admitted Duncan Wemyss, secretary of the Motor Vehicles Dismantlers Association.

It spells boom time for Britain’s biggest dismantler, Doncaster Motor Spares in S Yorks. Its boss Richard Martin told us: “On average we handle about 500 cars per week, but last week we collected about 100 more from the scrappage scheme.” He admitted the quality had been good too. “In general these models are cleaner, perhaps they have been in a family and passed down through the generations. They’re better quality than a scrap car.”

His company turns over several million pounds a year – hardly surprising when you take a closer look at how much money a single motor can generate in parts alone.
To find out we decided to ’strip’ a popular scrappage trade in – a 1999 Ford KA. First we identified 30 or so of the most sought after parts. We then put in a request for each one with an online clearing house used by dismantlers hunting customers.

As our inbox filled with prices for everything from tailgate struts to 1.3 litre engines, we selected the cheapest offer knocked off the VAT and postage, and began to establish a tidy sum for our little run around. By the end of the day we had generated a huge £1,451. Not bad for a car Doncaster Motor Spares will pay only £1000 for on average.

To see how owners would fare dismantling and flogging the parts themselves, we also compared our trade prices with those on auction site eBay. We discovered that an enterprising soul with a socket set and storage space could fetch nearly £800 for the same spares, although without Doncaster Spares 90 day guarantee. (See table)

So, what does this mean for us?

1) If you are in it purely for profit, before buying any Salvage vehicle, price up repairing vs breaking. You might be surprised how much you could make. Use eBay and parts sites to verify how much your parts are worth.

2) Remember the Scrappage scheme wont be around forever so this may be a temporary phenomenon.

3) If you are breaking, consider the time and storage implications, it may take a long time to sell parts individually, you will incur advertising costs e.g. eBay listings. And you will have the hassle of arranging postage or couriers for sending the parts.

Salvage Car of the Week – Porsche 911 (997) Turbo

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** Salvage car of the week**

This week a tale of two cars, each at completely different ends of the salvage spectrum.

Porsche 911 (997) Turbo 3.6
www.s-w-s.co.uk
2006 – 56 reg
Silver
7,040 miles
Petrol

Light panel & suspension damge to front left & right corners. Engine runs.

Honda Prelude 2.2i v-tec
www.aldershotcarspares.co.uk
1998 – S reg
Silver
94k miles
Petrol

£1,895

Honda Prelude- 2.2cc- 4 Wheel Steering- Factory Special Edition Tegi With Body Kit And Side Skirts And Also Limited Edition Wheels- Creme Leather With Black Piping- Air Conditioning- Electric Windows- Central Locking- Alarmed- Requires Bonnet- Cat C

Salvage car of the week – Audi R8 & 911 GT3 Clubsport

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Salvage Cars of the week

Audi R8 4.2 v8 Quattro – 2009 CAT D

Available on Bluecycle.com
Auction ends: 16/06/09
Current price: £42,770

Indication of damage, but not limited to SIDE,O/S/R QUARTER,O/S SILL COVER,O/S/R SUSPENSION,OIL COOLER,O/S/R CHASSIS,STARTED,EXTRA,S SAT NAV,SPARE KEYS,(EXCELLENT CONDITION)

Porsche 997 911 GT3 Clubsport Reg doc, spare key chip.

Available on s-w-s.co.uk
Current price: £34,950

2007 – 56 reg
White
13,884 miles
Petrol

Damage to off-side front & rear, not many details available on s-w-s, but would appear to be the result of a track-day crash.

Value of a Cat D repaired car

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I often get asked lots of questions around how much cheaper a Cat D repaired car should be vs a clean original example. So, I’ve compiled a quick overview of my thoughts below. (Following on from one of my posts on www.z4-forum.com

Firstly, there is nothing wrong with buying a cat D, provided you follow some fairly simple rules. Do your homework, and you can end up with an excellent car, and a complete bargain!

People looking for Cat D’s fall into 3 groups.

Group 1 – People looking for a cheap run-around which will be run into the ground.
Group 2 – The Dreamers – looking for their dream car but cant quite afford it, so need to compromise.
Group 3 – Exotica hunters – Looking for rare cars, normally with prices into the hundreds of thousands new.

When buying a cat D for your use, or buying a cat D to repair and sell, make sure you remember these target groups, as the groups are radically different and will want very different things.

When buying a Cat D here are my tips.

1) Make sure you purchase at the right price. As a guide I’ve always priced cat D cars at least 25% below normal book value. Although now were in a recession and the government has reduce the scrappage scheme, try to haggle for 25-30%.

2) Check the car out thoroughly – If you are serious, have a full inspection done, and get the repair work checked thoroughly. Some Cat D’s have well documented repair histories, along with photo’s of the original damage, and work to repair. If you don’t know what the original damage was, and what was done to repair, it raises a whole load of questions! In which case don’t touch.

3) When you come to sell, you will have trouble. People will buy Cat D’s, but they are much fewer than regular buyers. Most people will avoid a Cat D like the plague. Meaning you will probably need to sell dirt cheap. If it were a run around, or a car you wanted to keep and run into the ground, it would be very worth it.

4) If you still fancy a CAT D, there is always the option of buying damaged, and arranging repairs yourself. At least you know the quality of work, and some of the history this way. Likewise, you should be able to do it even cheaper!

These same tips apply whether your a buyer or seller, and are all important when looking to buy/sell a Cat D car.

Hope this helps. If you have any questions feel free to leave a comment, and I will respond.

Follow us on Twitter

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Well, we’ve succomb to the twitter pressure and signed up for an accout.

Details of how you can follow us are below.

Follow us on Twitter @ www.twitter.com/wrecks2riches

Salvage available now on e-Bay

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Salvage car of the week – Audi R8 & Nissan GTR

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This week we have some rarely seen exotic salvage, including the brand new Nissan GTR of which are there only a handful in the whole country.

Nissan GTR – 2008 model

Available on Bluecycle.com
Auction ends: 28/04/09
Current price: £20,010.00

Indication of damage, but not limited to THE LATEST NEW MODEL GT-R!SIDE,F/BUMPER,H/LIGHTS(brackets),N/S/F WING,O/S/F WING?,SUSP,WHEELS,N/S/F DOOR,N/S/R QUARTER,N/S SILL COVER,LIGHT SCRATCHES,STARTED,FULLY LOADED(imported version)

Audi R8 – 2007

Available on Bluecycle.com
Auction ends: 27/04/09
Current price: £17,900.00

Indication of damage, but not limited to Front bumper, bonnet, headlight, O/S/F wheel, O/S door, O/S sill, floor, O/S/R suspension, O/S/F seat airbag, floor pan, under rear bumper.

Salvage Car of the Week – Aston Martin DB9

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Salvage Car of the week

2008 Aston Martin DB9
A beautiful 2008 DB9 with fire damage is currently available on bluecycle.com. Exterior is almost mint however the interior and roof are quite substantially damaged by an internal fire.

Indication of damage.
But not limited to INTERIOR FIRE, SEATS, ROOF, ROOF LINING, DASH, CLOCKS, CARPET, DOOR CARDS, GLASS, SMOKE DAMAGED,DENTS AND SCRATCHES, HAS KEY, NO MILEAGE.

Available on www.bluecycle.com

On auction currently at £18,540
ending 17/3/09

Salvage Car of the Week – Lotus Europa

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Salvage Car of the week.

www.s-w-s.co.uk

Lotus Europa 2.0 S Reg doc, Sat Nav, spare keys & service book
2006 – 06 reg
Mauve
12,093 miles
Petrol

Moderate OS front & dash bags. Parts available inc airbags, front clam, front suspension and front bumper. We have the nav disc, V5, FSH & spare key

A bargain, in my opinion for a rare Lotus which is very infrequently seen on the roads. Based on the VX220, so it should be relatively easy to find the additional parts required to repair.

A bit of bad weather brings out all the best salvage!

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As the title suggests, a bit of bad weather is a salvage mans dream!
As the weather worsens and road conditions become worse inevitably there are more accidents. (We obviously hope no-body is injured!)
This increase in accidents leads to an influx of new salvage into the salvage yards as the cars pass theough the insurers. Often this means you get a lot of exotica your unlikely to see for sale as salvage.
These are often the people who just want to go out for one more drive before putting the car away for the winter…. Then…… Bang!

Mercedes C63 AMG
Currently available on Bluecycle.com
Bidding currently at £9,010.00

Damage
MERCEDES-BENZ/C 63 AMG ALL PANELS APART FROM N/S DOORS, BONNET, F/BUMP, F/PANEL, F/X MEMBER, O/S FLICTH+LEG, F/WHEEL, RADS, F/SUSP, F/AXLE, ROOF, O/S A+B+C POST, POSS ENG, ALL GLASS, BOTH F+R SCRN, F/SUB FRAME, F/GRILL, MARKS ALL ROUND, BONNET JAMMED, AIR BAGS

911 GT2
Currently available on Bluecycle.com

Aston Martin DB7
Currently available on Bluecycle.com