CLAYTON, N.C. — Victor Montes de Oca scanned several damaged vehicles as they rolled past an auction stage.
“Everybody wants a Ford truck in Mexico — Central America, too,” said Montes de Oca, a buyer for Honduran importer Travecor Peres. He comes every Wednesday morning to Insurance Auto Auctions off U.S. 70, where he may buy as many as 10 vehicles to ship to Latin countries.
“People there can’t afford a new car, but these they can,” he said.
As the dollar sags against foreign currencies, exporters are finding an increasing market overseas for vehicles that can be fixed and resold at a profit.
In Poland, people chase after Subarus, Nissans and Toyotas. In Lithuania, Lexus is in demand. Many Russians and Mexicans like four-wheel drive.
Most of these vehicles are damaged to the point of being declared losses by insurance companies. That generally happens when the repair would cost more than 80 percent of a vehicle’s retail value.
Worldwide buyers
A few being auctioned are intact stolen vehicles recovered after 30 days, after insurers have written them off. In both cases, increasing global demand has led to more than 20 percent getting shipped overseas, said Dan Oscarson, vice president of marketing for Insurance Auto Auctions.
The Chicago company sells more than 1 million salvaged cars a year through 136 auctions. At the Clayton auction, local mechanics, merchants and consumers compete increasingly with buyers on the Internet, who now generate 44 percent of sales. Durham and Wilmington, N.C., and Panama were just a few of the bidder locations flashing on a small computer screen behind the auction line on a recent morning.
Auctioneers say they regularly hear from buyers in Guatemala, Honduras, El Salvador, Mexico, Bolivia and Eastern European countries.
Those Internet buyers have helped double the average sales price for cars in the past four years, though most vehicles still sell for less than $2,000, Oscarson said.
Insurance Auto Auctions makes money from bidders who pay to enter auctions and from insurers and rental companies that pay to have damaged cars taken off their hands. The company remits all sales proceeds back to insurers.
Gary Prestopino, who tracks the auto-salvage industry for Barrington Research in Chicago, says salvageable U.S. cars will sell anywhere in the world there is burgeoning capitalism.
$1,000 to transport
“People in these markets still covet U.S.-made cars,” Prestopino said. “Because of the currency effect, they can get them at relatively cheap prices.”
Roma Saricevs, 24, of Klaipeda, Lithuania, is a purchaser for UAB Eurovestika, which buys 200 to 300 cars a month, all from Web-equipped U.S. auctions.
“We used to buy most of them in Germany, but now it’s cheaper to buy them in the United States,” Saricevs said.
It costs about $1,000 to ship a damaged car overseas, but the economics work because of the weaker dollar and lower repair costs abroad.
The dollar has lost 22 percent of its value against the euro in two years and has fallen against most other currencies. That slide has helped make U.S.-driven cars about 30 percent cheaper in Eastern Europe than comparable European-driven cars.
