Hammer Time: Charity Then, Charity Now

Steven Lang
by Steven Lang

My memories of ‘charity cars’ are not fond ones. Back in the late 1990’s the dirtiest public auction in metro-Atlanta would line up about 50 of these vehicles for the beginning of their sale. The acrid smell of blown head gaskets and leaking oils of every type would soon emanate the auction as most of these vehicles were pushed past the block. Back then you could buy a non-running car for about $20, and a running one for no more than $250. The high bidders were usually dealers, who would then bring back the same vehicles the following week and try to sell them for huge markup’s.

I remember a Volvo 780, rare as hen’s teeth, going through the ‘charity’ sale for $70 at Logandale Auto Auction and then being sold the following week for $1000. The jump box had mysteriously disappeared at the opening of that auction. So there was no choice but to push the car through in non-running condition. The question I asked a friend of mine that evening was ‘Who just got screwed?” The auction received a lower sale fee for the first run. So they got screwed a little bit. The new owner may have been given a vehicle with more issues than an MTV mock-umentary. They were a bit more up the creek. But the ultimate screwed parties were the charity and the poor benefactor who donated the vehicle in good faith. Thankfully, these days it’s a much different ballgame.

Charity cars are now becoming a big business at the auctions. 30% of the cars sold through Insurance Auto Auctions, one of the largest auto auction networks in the country, now go overseas. You want service? The buyers services department at IAA supports ten languages and has dealer relationships in all six of the inhabitable continents. You want bidders? Thousands of dealers (and public) can bid online or buy on site. Most buyers will send representatives to inspect the vehicles, and then bid online. The more popular vehicles can end up with bids from China, Ghana, and Mexico before they are finally sold to a wholesaler in Belarus or Turkey. The good ol’ boy is SOL these days.

The competition is stiff for a long list of reasons. The decline of the dollar. Low cost of labor overseas. Reasonable shipping rates from American ports. They all play a hand in the bidding process. But the one big ace in the hole is the level of standard equipment in the American market when it comes to vehicles. The average car in the United States can far eclipse a ‘loaded’ model in a developing market which means that these vehicles will end up with a very strong demand overseas.

After all is said and done, most buyers will end up with a vehicle that is still 25% to 35% below market value. Even after all repairs are done. Tens of millions of customers are seeking affordable transportation and your old jalopy sitting on the driveway may just be the ticket in the developing world.

Out of the 25,000+ vehicles that were donated to charities last year, the overwhelming majority of them are still in running condition. Those vehicles may require major mechanical work or have damage. They may be unpopular or guzzle gas. But in the developing world they are still sought after. Especially in those countries that are oil rich and cash starved.

In the next Hammer Time installment you will see how three different markets, Belarus, Bolivia, and the UAE, take your unwanted cars and give them a new life.

Steven Lang
Steven Lang

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  • Acubra Acubra on Mar 08, 2011

    Unbelievable number of salvages, Katrina recoveries, donated cars was sent to CIS/Russia. Buyers who worked at auctions scavenged all possible trash, polished and cleaned it to look youngish and then send overseas. Consequently, the perception of US car market is of a place where ALL cars are not loved, cared for, maintained and generally abused in any possible way. And all auctions are mere scams to bereave gullible consumers of their hard-earned.

  • Cabriolet Cabriolet on Mar 08, 2011

    I have been shipping cars overseas for the last 40 years. Most of the cars i ship go to Scandinavia and the continent. Mostly older classic european cars. Many people call us wanting to ship cars to the middle east & west africa and most of these cars are brought at auction. Some are running some are not. They want to place 4-5 cars into a 40 ft container. It can be done but the loading warehouse has to build special ramps inside the container. Many of the containers were not braced well and all hell broke loose. Now many of the carriers will not allow more then 3-4 cars to be loaded into a container. A few years ago we were shipping 38 ft Lincolns in 40 ft containers and one got delivered to the pier without being strapped down. I received a call from London when it arrived that the front and back of the container was all bowed out. I thought the car was destroyed but all it need were new front and rear bumpers. We have so many used cars in this country that many of them are shipped out to the Middle East. Many of the Japanese manufacturiers have contracts with the car carrying ships to take their off lease vehicles to the middle east. This helps them to keep the resale value up at the auctions. Otherwise they would be worthless.

  • Safeblonde You mean Reagan-era in story?
  • Bd2 Just imagine if in 5 decades the Telluride name were to be used on a new line of sporty 2 seater supersonic hovercraft.
  • The Oracle This is a proper plastic turd that has a wee bit ‘o performance.
  • Jalop1991 "Now, it’s an electric crossover wearing a Ford badge that utilizes Volkswagen’s MEB platform...." You misspelled "crossdresser".
  • The Oracle Been a good read so far.