Growing International Competition for US Wrecked Vehicles

Topics:  Roger Moore

June Soh
Voice of America
Washington, D.C.
June 19, 2006

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The Internet has changed many aspects of daily life and business. The latter includes some unlikely ventures, including selling wrecked cars. VOA's June Soh spent a day with a salvage man to find out what impact the Internet has on his business. The story is narrated by Amy Katz.

Auctioneer: "2000 Dodge truck, 2500, 5.9, two wheel drive, automatic trans." A salesman is calling out parts that body shops need. Someone ask if it is manual.

Customers looking for parts keep coming in. It is business as usual at King George Auto Parts, in King George, Virginia.

In his bustling shop, Roger Moore, a third-generation salvage man, is growing tense. He is shopping for wrecked cars that can generate a good return on an investment. "I used to go to the auctions with my grandfather when I was a child and just go through the trunks of cars just playing when I was 10 years old."

Now he doesn't go to the auction lots at all. Moore says, there is no reason to be there. "For the past couple of years we have been buying [cars] strictly off the Internet."

It is convenient but Moore finds a downside as well. “It is frustrating. Because so many people bid on cars the price is going up on the cars. It's not good for us. It’s harder on us. I used to go just one auction on the Internet. Now I am bidding at least three places."

Since Internet auctions became popular, wrecked vehicles from the U.S. are attracting bids from countries that Moore couldn't have imagined as competition before ... including Guatemala, Nigeria, Ghana, Armenia, Lithuania, Ukraine, Lebanon and Honduras.

Dan Oscarson is the vice president of marketing at Insurance Auto Auctions, a nationwide company based in the Midwestern U.S. state of Illinois.

"Selling prices have indeed increased over last couple of years. We have seen tremendous growth (in demand). Today we sell (crashed) vehicles to buyers in 65 different countries. And thousands of foreign buyers participate in our live auctions every week via the Internet."

PIERS, an import-export data tracking service, says 19 times more salvaged vehicles headed out of U.S. ports last year than three years before.

Oscarson offers one perspective. "These crashed cars go overseas and they are able to perform labor at much lower wages. When you combine that with the exchange rates, all of sudden it is economical to repair the vehicle there and sell it in their markets."

Moore has stopped fixing and reselling cars. Now he has mechanics pull useful parts and store them in the warehouse to sell to local body shops.

After cars have been stripped, they are crushed. Moore says he gets more money for the flattened cars these days due to the increase in the price of scrap metal. "This business is still good to be in. It's still a profitable business. It's not just as easy as used to be."

People like Roger Moore have discovered there is money to be made from the bad luck -- or bad driving -- of others. And now they can.