Cat Cons

Don't Fall For Core Buyers' Tricks

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Core handling is big business. Multiple core components can be sold off each vehicle. Multiply that by the millions of vehicles recycled every year, and that’s a lot of cores, more than 20 million. With an industry segment that large, auto recyclers are bound to face some problems when it comes to selling cores.

“There is a massive amount of misleading information out there,” acknowledged Dan Miller, Legend Smelting & Recycling, Inc. “In the past, many core buyers worked on a large margin. Now that the industry has been changing and auto recyclers are trying to find more money, they have begun moving from the core buyer to the end user. This has led the dishonest core buyers as businesses do whatever it takes to keep market share.”

For example, Miller said that some core buyers place a high dollar amount on the 20 converters that everyone knows, but does not give the upgraded price on converters that may be less familiar to the auto recycler.

“This has left auto recyclers frustrated with anyone new that comes in wanting to buy their converters,” he added.

Other problems are inflated price sheets, sheets that only list a few categories of converters and higher prices offered just on General Motors converters.

Miller stated that just because a sheet lists a higher price for some items, does not mean more money for the auto recycler.

“It could be the core buyer is offering a few more dollars for a category of converters, but is placing converters in that category that are actually worth an upgraded price,” he explained.

According to Miller, in the past there were only about 20 to 25 converter categories. But, because of changes that have taken place over the last six to seven years, there now can be as many as 70 categories. The categories are dependent on the core buyer. There is no standardized system.

“These categories are to the recyclers’ benefit if they know what converters should be placed in each category,” added Miller. “Legend Smelting and Recycling has 64 categories (not counting the diesel converters). The categories have come directly from assays done by our in-house lab. These results have allowed Legend to influence the way that converters are bought today.”

Padding the prices offered for General Motors cores is another trick to watch out for. Just because a core buyer offers a higher price on General Motors cores that all the prices will be higher.

“There are a lot of yards and shops that only inquire as to the core buyer’s General Motors price when deciding to whom they’ll sell their converters,” explained Miller. “Core buyers know this and artificially raise their General Motors prices while keeping their other prices low.”

Miller said the best thing recyclers can do to know they’ll get a fair deal is to educate themselves about the core industry.

“Getting updates and spending the time each year to learn what has changed is something that is very important,” said Miller. “In the past, I have extended invitations to auto recyclers to visit our facilities to learn how we grade converters. For those that have taken advantage of this, they’ve said it was very helpful. Just remember to bring gloves.”

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