Feeling the Supply Chain Pinch!

By: Michele Lee

Junk car prices rose 55% on average across the U.S. in 2021 and the demand continues into 2022.

Scarce new and used vehicle supplies, along with strong used parts demand, were the major factors in the average price of junk cars increasing by 55% in the U.S. in 2021.  The average price of a junk car increased by $170.85 between the start and end of 2021.  The average price of a junk car started 2021 at $311.87 and finished $482.72. 

U.S. junk car prices can vary regionally.  Local supply and demand as well as variations in vehicle make, model, condition and content reflect in the prices. 

What caused junk car prices to rise so much in 2021?

One major contributor to these high junk car prices was the COVID-19 pandemic-related microchip shortage, which caused the loss of millions of units of new car production.  Many buyers who could not find new cars on dealer lots then entered the used-car market, where increased demand there pushed up used car prices to very high levels. 

Many price-conscious buyers had to settle for older, higher-mileage used cars that required more maintenance.  Under normal circumstances, many of these bottom-level used cars would have been junked or parted out.  Many would-be buyers who were priced out of the market decided to hold onto their cars, keeping them out of the used-car market, while many drivers who might have junked their cars decided to fix them up and drive them longer or just let them sit. 

Meanwhile, the reduced supplies and the increased demand for used car parts pushed up the values of junk cars.  These cars were now being purchased not by junk dealers for their scrap value, but by auto recyclers who would be selling them for parts.  This made junk cars much more valuable and brought higher prices.  And, this is where we are today. 

The ABC’s of Taking Pictures of Auction Vehicles

By: Peak’s Auctioneer Michael Whitfield

The ABC’s of Taking Pictures of Auction Vehicles

Don’t forget that the vast majority of communication is non-verbal. In 1967, UCLA Professor Albert Mehrabian and colleagues performed groundbreaking research on interpersonal communication. Out of this research came, arguably, the best-known set of numbers within the teaching and communication disciplines: the idea that the total meaning in a message is “7 percent verbal, 38 percent vocal, and 55 percent facial.”

I cannot stress the importance or impact of visual appeal on your auction’s bottom line. These quick and easy tips will have a significant impact on your results.

  • TAKE PHOTOS in LANDSCAPE (horizontal) MODE. Peak’s auction software works best when photos are taken in this manner. Portrait (vertical) pics should only be used on extremely tall units such as semi tractors.
  • BACK UP and ELIMINATE VISUAL OBSTRUCTIONS – Remove all vegetation or debris around the unit and provide plenty of empty space in the photo frame so the vehicle doesn’t get chopped off. We are able to crop excess white space if needed. You may need to move your unit to a staging area to get the best photos.
  • AVOID SUN SPOTS – If possible, take photos on a cloudy day, or orient the cars to take photographs while facing North or South. 
  • TAKE PLENTY of PHOTOS. Our minimum standard is 6 photos (4 corners, front seat including steering wheel, and engine compartment). The higher the value of the vehicle, the more critical it is to take additional photos such as tire wear, instrument panel, vin plate, etc..
  • AVOID USING PHOTOS FROM the INITIAL TOW. These types of photos are visually unappealing and can be an inaccurate representation of the condition of the vehicle.  Most of these photos are taken at night which makes them unusable for the auction process.