Tumbling scrap metal prices lead to 14% drop in cars being scrapped

EDGWARE (Scrap Monster): The most recent data obtained from the DVLA through Freedom of Information request by Motoring Research indicates that rate of scrapping of old cars has fallen significantly during the month of January this year. The drop in rate is mainly attributed to the sharp fall in scrap metal prices.

As per DVLA data, only 70,445 cars were issued with a certificate of destruction in January 2016. This is 14% lower when compared with the certificates issued during the same month a year before. DVLA had issued 82,265 certificates of destruction during January last year. However, the rate of cars being scrapped has shown improvement when compared with the just previous month. Official data indicates that the cars being scrapped had hit lows of 64,081 in December last year.

The fall in scrap metal prices is to be blamed for the drop in rate of car scrapping, noted vehicle recycling service CarTakeBack.com. The scrap metal values have tumbled by almost 65% when compared with the price levels during March last year. As a result, fewer people are opting to scrap their old cars.

While commenting about the month-on-month rise in car scrapping rate during January this year, CarTakeBack.com noted that customers were seen holding on to their cars initially, on hopes that prices will recover soon. However, with no signs of price-rise soon, they are now willing to scrap their car even at low prices. According to them, there have been some signs of slight recovery in scrap metal prices at certain areas, mainly on account of local competition. CarTakeBack.com believes that the prices would eventually start to decline further from current levels.

The new legislation introduced to prevent cars being abandoned, states that all cars being scrapped require a certificate of destruction.