Working Smarter and Using Technology | Auto Data Direct, Inc.

Working Smarter and Using Technology

for Auto Recyclers on Monday, May 11, 2020 by Jay Svendsen

As this article is being written, we have entered into a totally new environment as the world faces the problems and issues in dealing with the COVID-19 Pandemic. We are in uncharted territory, and people and businesses worldwide are looking for ways to stop the pandemic and get the world back to some sort of normalcy. With much of the world still under stay-at-home orders through May, business, travel, and pretty much everything has slowed down. Business owners are trying to find ways to keep business going, and many are finding they need to use technology to do so.

Because of the lockdown, it is uncertain when world trade will open back up and what restrictions may be in place when it does. For auto recyclers, there may be a good opportunity to buy more inventory that was being purchased by foreign buyers and leaving the country. According to the “experts” in the auto recycling industry, buying good inventory is key to having a successful business. Vehicles always breakdown, and there will always be a need for vehicle parts to keep the world moving. Auto recyclers are considered critical businesses, so they have to figure out how to operate in this new environment.

Using tools like NMVTIS inquiries can help a recycler determine if a vehicle is a good buy for parts or rebuilding. NMVTIS inquiries show the last state of title, mileage, brands applied, salvage reports made, and changes in ownership - all of which are very useful in determining if a vehicle is a good candidate for purchase. There are over ten million salvage reports made each year, and the big salvage auctions report to NMVTIS almost every day. Many vehicles that get damaged are sold at auction, rebuilt, branded, sold back to the public, damaged again, and sold again. With most auctions being online now, there is not an opportunity to visually inspect and check a vehicle. Because of this, the chances of buying a vehicle “with issues” is greatly increased. When looking at a vehicle up for auction, the pictures and other information available are a big help, but they don’t always tell enough about the vehicle. The extra information provided from an inquiry can tell much more about a vehicle.

If a NMVTIS inquiry is done on a vehicle, and it shows many changes in ownership, mileage discrepancies, previous salvage history, brands, or a salvage auction history, it raises concern about the quality of the parts on that vehicle, even if they look good in pictures. Buying an expensive salvage vehicle just to find out that many of the parts are not good for resale can be very damaging. Good quality parts help a business maintain happy customers, reduces returns and builds a business’s reputation as a great supplier. Vehicles with multiple or excessive changes in ownership might indicate that the vehicle could be a “lemon” with mechanical issues. A vehicle that was previously at a salvage auction may have had the good motor or transmission pulled and replaced with a “dud,” and now it’s back at auction. If a vehicle is being purchased for rebuilding or resale, it is important to make certain the vehicle does not have salvage history even if it is sold on clear title, as the state will want to issue a salvage/salvage rebuilt title when the vehicle is later sold.

NMVTIS reporting is a federal, and sometimes, a state requirement, and it is important for businesses to do their duty as it helps everyone by accurately reporting vehicles as required. The regular reporting helps prevent vehicle cloning, allows everyone to know about events that may have affected a vehicle, tells the history of a vehicle, and informs people which vehicles should no longer be a vehicle. This helps everyone when evaluating whether to purchase a vehicle or not. Vehicles with a salvage history may be great vehicles if the repairs were done correctly, but many times, repairs made might be less than desirable, so the vehicle should be checked out. Most of the vehicles that auto recyclers want do not have salvage history unless their primary business is selling scrap, or the vehicle has had very few changes in ownership and has not been at salvage auctions before, as these cars generally provide better resellable inventory.

One advantage that many auto recyclers have is that as they are looking for parts cars, they sometimes come across some excellent vehicles for a quick fix and flip as a whole car. Sometimes these vehicles need the parts that the recycler has in inventory, sometimes these vehicles have the parts they need, and sometimes they are just too nice to pass up. With a quick check of a vehicle history, they can confirm it’s the deal they think it is.

As the data in NMVTIS gets better and updated quicker, NMVTIS inquiries become a great tool for auto recyclers.