If you have ever handed your old car over for scrap and got cash in return, you might have questioned how the scrap yard makes any money when they pay YOU the customer for your scrap metal! In this blog, we will explore how scrap yards make money through purchasing and processing scrap metal and vehicles. Let’s get started!
Selling Scrap Metal
The primary way that scrap yards make money is by purchasing and processing scrap metal and selling it on, often to larger recyclers or manufacturers, for a profit. The core business model for scrap yards is to buy low, process and sell high – this is how they generate revenue while still paying you for your scrap. Plus, scrap metal is far cheaper than mining and refining new metal, so buyers rely heavily on scrapyards to supply raw materials.
Selling Scrap Vehicles & Components
Scrap yards also buy end-of-life vehicles and remove and sell any functional or rare parts – this can be highly profitable! The remaining components can then be scrapped for their metal and sold for more profit. In order to maximise their profit, scrap yards aim to maximise material recovery by recycling a high percentage of the car’s components.
Other Revenue Streams
Some scrap yards charge service fees for recycling certain materials, particularly if they are hazardous and hard-to-process. In addition to this, some scrap yards offer services like vehicle pick up and towing for a fee, this helps to offset operational costs and adds another revenue stream.
At A&L Vehicle Recycling, you don’t have to worry about paying for vehicle pick up, as we offer a fast and FREE scrap car collection service that has been tailored with your convenience in mind. We even offer same day pick up depending on your location!
To arrange your scrap car pick up, reach out and contact us today. To find out how much you can get for your scrap car, use the button below to get an instant, no-obligation quote.
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