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Copart, Inc. Message Board

  • bennett27 Feb 5, 2009 10:08 PM Flag

    Copart and tight credit

    Will tight credit conditions make it more difficult for auto recyclers & rebuilders to purchase vehicles from Copart? Thanks.

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    • Auto dismantling industry is based on cash and carry. As the average age of cars owned by the general public gets older, the pool of new customers grows big time. Time delayed but is starting to happen (just like early 80's) Insurance companies are telling adjusters to buy used. "What else is you're car but used auto parts"
      or "Why buy new, when used will do" The wrecking yards that aren't over extened with debt, will do very good. Just like the Carter days. Many wrecking yards don't have debt and don't use credit lines for payroll. Maybe inventory though. LKQ is a company to watch on the web. SCHN ownes Pick in Pull yards. The real ones to watch are you're local dismantlers. Everyone has to adjust payroll some or job discriptions and look at what inventory will sell. Not 2008-09 stuff. More like 5 to 15 year old cars and trucks.

      • 1 Reply to cal57chev
      • Have to agree. Most rebuilders have pretty deep pockets and they don't sit on these units for very long if they sell to the export market. If they are rebuilding and have a yard to sell surplus parts it is extremely lucrative.

        I can't speak to LKQ as I do not follow them that closely, know they have really good management. They are a public company so I guess you should perform your own DD. They are not my cup of tea right now. I buy parts from them as the quality is always very good as promised and they really mean what they say when they describe a part. You pay a small premium when dealing with them but that premium is welcome and disappointment never is.

        As to "U Pull It Yards" a lot of these guys are really in the scrap metal business as they buy ten years and older in most cases. Generally, these cars are bought on the "curb"; a lot of these folks used to go to Copart but all the dings have made it less profitable for U-Pull It operators to buy from them.

        Presently, scrap metal is in the basement with the rest of the economy. Copper and cats are coming back a little as is scrap steel but nowhere close to what it was doing before the crash in September (What Recession Joey??).

        I haven't noticed tight credit affecting auction prices at salvage or car auctions where older cars are trading. Well capitalized dealers, rebuilders and yards seem to be doing O.K. One guy I know in salvage is restricting credit to the repair shops however but that isn't really germane to Copart.

        As to adjusters trying to convince the insured to use recycled parts is true. I can tell you from several years of experience that a used OEM part will always be better than the crap in the after market parts from China and other third world shit holes.

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