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Retirement Funds: Recycled vehicle prices up 20 percent since 2019

Toronto, Ontario – For Canadians with an old clunker car collecting dust in their driveway, now may be the perfect time to cash in on selling it for scrap, according to a report from the Automotive Recyclers of Canada (ARC). 

The Retire Your Ride program has seen a 20.4 percent increase in the average price paid for a recycled vehicle, rising from $321.76 in October of last year to $387.37, according to the auto recycling advocacy group.

The program allows drivers to put their vehicle up for bid among auto recyclers, with the highest bid being paid out to the driver (as well as a free tow).

The recent increase in driver payouts is likely due to fewer kilometres being driven by Canadians since the beginning of the pandemic, and therefore fewer total-loss classified vehicles to be auctioned off.

A vehicle is considered a total loss when, following an accident, the cost of the vehicle’s repairs is greater than the overall book value of the car. These vehicles may then be auctioned off to auto recyclers who may either salvage what parts they can for reuse or sold wholly for scrap metal, depending on the severity of the damage.

The Retire Your Ride became popular during the great recession of 2008 – 2009. The program was formed in 1997 as an association of associations of ARC, representing, through the provincial affiliates, over 400 end-of-life vehicle (EVL) recyclers and dismantlers throughout Canada.

By January 2011, the program had surpassed its original targets and had permanently retired over 120,000 vehicles and reduced thousands of tons of smog-forming emissions.

With the option to auction off your ride, bidders must be ARC members only. Winning bids vary in the province, type of vehicle, condition, and location with an average bid in the $300 to $400 range. The winners pick the clunker up at the owner’s home free of charge and the owner gets paid at the door.

The auction process retires 10 to 30 cars a day across Canada. Each sale is tracked to make sure the car is scrapped.

Fletcher said that dealers often refer their customers to the site should they come in with a vehicle that has no trade-in value.

Should manufacturers be considering a Retire Your Ride program, Fletcher offers his advice: “First of all, go with an incentive in the $1,000 to $1,300 range as they did in the past, with either the automaker or government or combination funding that amount. Anything over that threatens the used car market.”

He continues to explain that once the customer’s trade-in fits the RYR criteria, the vehicle will go up on the ARC site. The winning ARC member picks up the car at the dealership and pays the dealer.

And most importantly, the vehicle winds up as scrap with its VIN off government records, explained Fletcher.

“We are looking at the big picture. We want to make people aware that the RYR program is still operating. So, if someone wants to put an incentive behind it and turbocharge it, we have the tow trucks and capacity to handle all of that throughout Canada – even the North West Territories.”

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