Warning of “dramatic” increase in abandoned cars
Vehicle dismantlers have warned that the major falls in metal prices in recent weeks could trigger a ‘dramatic’ increase in the number of cars left abandoned in the streets, writes Nick Mann.
More vehicles are already being abandoned on the streets following recent falls in metal prices. And, the price falls have prompted concerns that some companies contracted to councils to collect ELVs on bahalf of councils will not be able to honour their agreements.
But, there was good news for some car dismantlers, as Autogreen – one of two networks of treatment facilities allowing vehicle manufacturers to meet their recycling obligations under the ELV Directive – revealed it would forgo the charges it levies on its member facilities for producing Certificates of Destruction and logging them on its system, to help them through the difficult predicament.
In a statement released to letsrecycle.com, Autogreen said: “In light of the current economic climate and to further support its members in achievement of the regulatory 85% recycling target for ELV’s, Autogreen has took the decision to assist its members, by offering a zero cost route to data reporting and assisted compliance, for all vehicles handled by those facilities associated with Autogreen.”
This means that, from November 1, there will be no charge for facilities when they issue a Certificate of Destruction (CoD) and enter it onto the network’s on-line reporting system.
And, the organisation confirmed that this change would apply to the issuing of CoDs for all vehicles and not just those manufactured by one of its contracted brands.
Speaking to letsrecycle.com today about the issue of an increase in abandoned vehicles, Richard Reynolds, the national contract manager for London-based car recycling firm Redcorn said: “It could go back to the bad old days when you see vehicles abandoned on the streets”
He revealed that his company, which holds contracts to collect abandoned and nuisance vehicles for 12 local authorities, was “already getting calls from councils about cars being left in car-parks,” and claimed that “just after Christmas you’re going to see it beginning to pile up”.
In the past, he explained that the high cost of metals would have meant that those abandoned vehicles would instead have been taken to unlicensed car dismantlers and scrap metal dealers.
Mr Reynolds’ sentiments were echoed by Duncan Wemyss, the secretary of the Motor Vehicle Dismantlers’ Association.
He said that, while the End of Life Vehicles (ELV) Directive meant there was free take-back for all cars recycled through registered treatment facilities, “one can fairly assume we could start seeing an increase in the number of abandoned vehicles”.
The problem will come, and its probably there now, if the value we’re able to get for the total metals from a vehicle comes down beyond the recovery cost of the work we do
Duncan Wemyss, MVDA
Mr Reynolds explained that the value of the ferrous metals contained within a car had fallen dramatically, from £120 earlier in the year to just £20 now, and added that “we anticipate that by Christmas it’ll be zero per tonne”.
He claimed that the fall in value could have a “catastrophic” effect on smaller dismantlers’ operations, and in particular could jeopardise the contracts some dismantlers had signed with councils to collect and dispose of abandoned vehicles where, due to the high value of metals, they had agreed to pay the council to take them.
“If people have tendered to offer councils a certain amount of money for cars it could backfire,” he said. “In particular if they’re a one-man band and make all their money by taking cars to be dismantled.
“Some are going to have to go hand and glove back to councils and hand back the contracts.”
Mr Reynolds added that, while some contractors would start to charge for collection and disposal of abandoned vehicles, “we’re always in a position to be able to take vehicles off councils for zilch,” but added that “we can’t offer them money for them right now”.
Mr Wemyss claimed that the critical point for vehicle recyclers would come when the value of non-ferrous metals and parts within cars also fell.
“The problem will come, and its probably there now, if the value we’re able to get for the total metals from a vehicle comes down beyond the recovery cost of the work we do, that’s where the fun starts,” he said.
“Everybody looks at the ferrous price but we do regain value on catalytic converters and non-ferrous metals,” he explained, adding that “its difficult to tell if that level’s been breached,” he added.
However, Mr Wemyss also explained that economic slowdown’s effect on people’s willingness to buy new cars could provide a plus point for car dismantlers in terms of spare parts sales.
“There’s always the hope that people keep their cars longer and, in that sense, come to our sector for parts rather than buying them new,” he said.
Mr Reynolds reported that Redcorn’s “progressive” spare parts division was also providing a boost to the company’s fortunes.
And, he added that the firm’s other operations, such as its work for the DVLA with un-taxed vehicles, was compensating for the downturn in the value of metals from abandoned vehicles.
“If you’re working for a council, the money you get back from doing work on fines balances out the cost of collecting abandoned vehicles,” he said.