How To Sell A Junk Car For The Most Cash
Hanna Kielar7-minute read
February 09, 2022
Whether your car suffers an accident or a critical engine failure, there may come a time when it's totally inoperable. A car that can't run safely is considered a junk car, but safety isn’t the only reason a vehicle may be sent to a scrapyard.
For instance, your insurer might pay a claim on your car and then issue a salvage title denoting that it’s considered a total loss. Your car may also be deemed junk if it simply costs more to repair than it's worth.
If any of these scenarios happens to your vehicle, you may find yourself wondering what to do with a junk car. Learning how to sell a junk car may be the best way to salvage the situation.
Consider Getting Your Car Rebuilt
You don't necessarily have to sell your junk car for scrap. Alternatively, you can rebuild it – either for your own use or to resell with the hope of making a greater net profit. While a rebuild is worth much less than a standard car, it should also be more valuable than the scrap value of the vehicle. Ultimately, it's a question of economics and the investment of time and money necessary to restore it.
Once your car has been junked, it'll have a salvage title or junk title courtesy of the insurer. Upon rebuilding the car and submitting it to several tests showing that it's safe to drive, the DMV will issue you a new rebuilt title. The rebuilt title serves as proof of the history of the car, but – while it shows that the car is safe to drive, it also devalues it.
As a rule of thumb, a rebuilt title is going to be worth about 20% – 40% less than a similar car that was never junked. However, it really depends on the case, and requires a professional look from a mechanic to ascertain the value and condition of the car. Reach out to a local mechanic for help in deciding whether rebuilding your car is the way to go.
Prepare To Sell Your Junk Car
As you consider your options, remember that junking and rebuilding a car is often expensive and time-consuming and might not be worth the time or money. When this is the case, the most convenient and efficient way to get cash for junk cars is by selling them to a qualified scrapyard.
While a junk car is worthless to you, scrapyards have the tools, expertise and connections to use what's left of your car for resale value. This involves stripping the car for spare parts and reselling them independently.
While you can often remove parts and accessories on your own to sell without a middleman, junkyards are indispensable in that they have the means to crush the remaining car shell into scrap metal that sells at a hefty $200 per ton. Junk cars can also be sold at auctions, but scrapyards often buy them.
Find Out How Much Your Car Is Worth
Before you decide how to sell your junk car, it's essential that you determine how much your car is worth. If the value outstrips the repair price, then rebuilding can often be economical. Likewise, it will make it easier to sell to junk car buyers at an auction for a greater value than the scrapyards would provide. Furthermore, charities that accept junk cars can sometimes provide you with a tax write-off that's greater than the sale price of the car. For example, in the case of sales below $500, you can claim the fair market value of the car up to $500 as a tax deduction.
Legally speaking, any voluntary transaction between two uncoerced, knowledgeable individuals is a fair price. However, the fair market value is a broader metric based on the sales of similar vehicles. The Kelley Blue Book Fair Market Value metric is an example of fair market value, and understanding these metrics is key to selling cars for cash.
Gather Your Paperwork
One of the first steps to junking your car is getting all of your paperwork and information together. This includes general information, such as the vehicle identification number (VIN), mileage, body condition, make and model. You also need to provide the most detailed information you can about the current state of the car and the damage that it's suffered. Many states require titles for the sale of a junk car, and yards often enforce this requirement, even when the state doesn't ask for it.
Selling a junk car with a title has the advantage of providing you with greater choice in the marketplace. If you want to sell a junk car without a vehicle title, you'll be restricted to states – and junkyards – that accept these transactions. If you’re unable to locate the car’s original title, you'll need to get a replacement title first.
Cancel Your Insurance
If your car isn't running, it seems like a no-brainer to cancel your insurance and quit paying premiums as soon as possible. The main downside to eliminating your insurance coverage on a junk car is that it won’t be protected if it suffers comprehensive damage, like the type that might come from a thunderstorm, or even theft.
However, you'll often find that extenuating factors require you to maintain insurance coverage on your inoperable junk car until you've completed the sale.
For one, some states require that all vehicles have insurance, even if they're inoperable. Second, if you haven't paid off a loan on your car, then the lender is also likely to require that you maintain insurance if someone steals the vehicle when it still holds a lien on it.
Consulting local laws and your lender’s policies will help you figure out if you can cancel your insurance before completing the car’s sale.
How To Sell Your Junk Car For Scrap
Once you've settled on selling your junk car for scrap, you need to find out how to sell your car to a junkyard. You'll need to do some research to find potential buyers, but it's typically straightforward once you know what you're looking for.
1. Find A Licensed Auto Salvage Yard
While you can find auto salvage yards in your area with a quick Google search, you need to make sure to choose one that’s licensed. These licenses exist on a state-by-state basis, so you can check your state's DMV website or compare different junkyards.
2. Read Customer Reviews
Customer reviews are a useful way to decide whether a junkyard is worth your time, with testimonials providing details of their experience that may run the gamut from sale prices to professionalism. However, you should keep your eye out for certain key indicators of quality. Tow truck drivers who provide free towing services for your inoperable vehicle and a painless sale process are important perks to look for.
3. Request Quotes
Whether you send an email, call or visit in person, you should get at least three competing quotes from local junkyards before making a decision.
4. Compare Offers
The first factor to look for in an offer is the final sale price, which should be roughly $200 per ton of metal. However, you need to see if there are any hidden expenses or extra responsibilities alongside that figure. If towing isn't included, then transportation will end up coming out of your own pocket. Likewise, ask if you need to remove non-metal parts yourself or if the buyer will strip the vehicle. It may be worth accepting a lower dollar value per ton of metal if the junkyard handles junk car removal services, stripping the vehicle and so on.
5. Prepare For Pickup
Once you've accepted an offer and set a pickup time, remove any parts and custom installations you can either use yourself or sell separately. You should also check your car for valuables and personal items and take off the license plate so you can turn it in to the DMV and report that the car has been scrapped. This step is legally required in many states, so you should maintain possession of the car until you've removed the license plate.
6. Complete The Sale
Once you're at the junkyard, the final step is to formalize the sale process. You should receive your cash or check before signing any legal documents, and then you will sign a release of liability and fill out the pink slip.
Once you've signed over the title, the car belongs to the junkyard, and they can proceed to scrap it. Notify the local DMV of the sale if that's required in your state. If you have no legal obligations related to junking your car, then this is the end of the sale process.
Consider Donating Your Car To Charity
Many charities accept junk car donations, with causes from helping veterans to supporting the Make a Wish Foundation. There are many advantages of donating cars to charity, such as the fact that charities will accept virtually any vehicle. Furthermore, the accompanying tax deduction is often equal to the sale value of the car without any of the efforts of selling it yourself.
While the exact deduction depends on the type of charity, a 501(c)(3) charity allows you to earn the fair market value up to $500 or the exact sale value. While this comes in the form of an increased return on next year's taxes rather than cash in hand, it can offer similar monetary returns to selling your junk car.
The Bottom Line: Understand The Value Of Your Vehicle
If your car truly is junk, there are many ways to go about selling it so long as you're properly prepared and understand your options. Knowing what your car is worth and the extent of damage is largely the key to choosing between rebuilding or scrapping it. However, you shouldn't assume that your car is junk unless you've gotten the salvage title. If it's still operable or practical to fix, then keep in mind that affordable, older vehicles are in high demand among collectors and hobbyists. In this case, knowing how to sell a used car is the way to get the most value for your vehicle.
Table of Contents
Viewing 1 - 3 of 3
How To Fill Out The Pink Slip When Selling Your Car
It’s crucial to know how to fill out the pink slip when selling your car. The pink slip, or Certificate of Title, proves ownership of a vehicle and allows a transfer of ownership.
What Is The Average Used Car Price In America?
The used car market has evolved to become more competitive than ever. To help you find an amazing deal on your next vehicle, here's what the average used car price is in America.