End of Life Vehicle (ELV) sales make up a $20 billion industry for automotive dismantlers and recyclers who handle scrap steel, aluminum, copper, plastic, and glass. Traditional transactions for these vehicles are impacted by online sales and auctions, in which international buyers leverage attractive offers – their domestic counterparts cannot always compete.
“They face a lot of problems caused by the fact that more and more salvage vehicles are leaving the U.S., reducing the number of vehicles that recyclers can acquire,” said DMV.com researcher Jordan Perch. “The fact that there are fewer salvage vehicles available for purchase by recyclers increases the price of the ones that are left in the U.S. market, which reduces recyclers’ revenues greatly.”
Auto recyclers are expected to fight against regulations allowing buyers from other countries to acquire junk cars so easily, requiring stricter rules as to who and how one can buy a salvage car at auctions in the U.S. 1
Domestic automotive recyclers are particularly concerned with unlicensed and unregulated buyers from Mexico, Nigeria, and UAE who not only generate unfair competition, but could undermine industry efforts to comply with registration laws and environmental best practices.
European Union passed the End-of-Life Vehicle Directive, which aims at making dismantling and recycling of ELVs more environmentally friendly. It sets clear quantified targets for reuse, recycling and recovery of the ELVs and their components. Following suit, the national Mexican government also released their National End of Life Vehicle Management Plan, which maps out future designs for processing ELVs in Mexico. 2