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      09-26-2019, 06:53 PM   #63
Flying Ace
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Quote:
Originally Posted by 48Laws View Post
BMW and the shipping vessels obviously have insurance that’ll cover all of this. There’s essentially no total loss. These cars will sit for a few more months then will be scrap metal. These cars only mean a lot to consumers not the manufacturers themselves. That’s the mind tricks.
you are correct. What most people don't understand with this situation is:

1. BMW doesn't give a shit if it's a $150k M6 sitting there. It's all numbers to them. They got most of the original costs back in the form of insurance payment, and then they were likely still able to fulfill the customer's original order, so they barely lost anything other than opportunity cost and any gaps in insurance payout versus true cost.

2. When talking about the scrapping business, it's much more economical to scrap than to strip. Especially when we're talking about parts that are questionable due to damage from salt water. Compounding the potential liability of selling damaged parts, it's much more economical to scrap than to strip.

I'm guessing, each car has at least about $500-$2000 of scrap value. The metal is the most valuable part of the car. Typically, they drain all the fluids, and remove hazardous materials as required by law (mercury in the headlights, the battery, etc.), then they crush the car, move into into a machine that chews it up, and separates the metal from the other stuff. The metal gets picked up by a giant magnet and the other stuff goes into a landfill.

A strip would require way too much time and effort. You need to find someone who'll buy it. That person then will strip and sell valuable parts (notwithstanding the liability issues). Then that person STILL has to scrap.

But here's the thing....there's a ton of costs associated with this activity, the labor, the space, and the disposal, so ultimately, a stripper may not pay as much per car than a scrapper as there's no certainty of profit on every car.

Even though I estimated each car is worth about $500-$2000, that's the net value per car. It costs money to dispose things into a landfill and to follow regulations to dispose or neutralize hazardous materials.
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