Auto Recycling World OCT 2022 / by Steve Fletcher / Read original article
Steve Fletcher, Managing Director of the Automotive Recyclers of Canada, discusses the change in the relationship between salvage auction and auto recycler, and how better communication between all industry stakeholders could open up better opportunities down the line.
Auto recyclers rely on a steady flow of total loss vehicles from the insurance industry to secure their inventory of parts to provide to collision repairers and insurers—ideally to lower cycle time and severity and prevent further total losses. The balancing of interests in this mini-circular economy, with the policyholder in the middle of it all, is always interesting.
However, recent moves by salvage auctions and overall trends in salvage disposal are negatively influencing the ability of auto recyclers to fulfill their role. And, when one aspect of a circular industry is hampered, the entire system is affected.
Salvage auctions exist to act as an intermediary between insurers and auto recyclers. Traditionally, insurers had direct contracts with local auto recyclers to handle their salvage. Recyclers, working with their customers— collision repairers—and their own parts inventory needs, would determine which path a vehicle might take—repair or dismantle for parts. One problem with these contracts was that you had to take every vehicle acquired by the insurer, and we all know some brands are totaled much faster than others, which can overwhelm a recycler’s inventory or repair needs.
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