We give a history of “cash for cars” to explain how it began and what it means today. We explicitly define “cash for cars” for future reference. To the best of our knowledge this is the first such attempt at a formal definition of “cash for cars” and it will have major implications for second hand car owners and the industry.
History of “Cash For Cars”
Cash for cars has been a Google search term since the beginning of the search engine. Initially the phrase may have been used as part of sentences such as “Where to sell car for cash?”. But later on it started getting used as a standalone phrase after the introduction of the Car Allowance Rebate System (CARS) vehicle scrappage program. The CARS bill passed in 2009 by the Obama administration used some $3 billion USD to incentivise the removal of older vehicles with more fuel efficient ones. The program was a huge success and all of the money ended up being used within a few months. In the same year similar vehicle scrappage trials were trialed in New Zealand, first in Auckland and later on in Wellington and Christchurch. No country wide vehicle scrappage program took place in New Zealand.
Informally the CARS program was called “cash for clunkers” and this helps explain why the search term “cash for cars” reached its peak in 2009. Although initially “cash for clunkers” dominated Google searches in the US over “cash for cars”, these days “cash for cars” has become the preferred phrase. This can been seen when the two phrases are plotted together during the past 5 years.
In New Zealand the phrase “cash for cars” has kept gaining popularity pushed not so much by public adoption but rather by Google search and Google Ads. In New Zealand the term “wreckers” is many times more popular than “cash for cars” whereas in the United States it is the opposite.
Defining “Cash For Cars”
Thus far we have explained how the phrase “cash for cars” became a search term but we have not explicitly defined it or explained what it is. Legislation in the United States and Google search itself gave rise to the product that we call “cash for cars” today. Our business defines “cash for cars” as a Service as a Product and we operate much the same way as other similar businesses such as Airbnb and Uber. The service that cash for cars businesses provide includes those that traditional wreckers, auto dismantlers and vehicle auction companies provide and improves upon them in many important ways. The removal/disposal or selling of a scrap vehicle through a cash for cars business has many advantages. We estimate that if Kiwis stopped using auction sites and wreckers and exclusively used cash for cars businesses they would on average get $200-$1000 more for their scrap vehicle. The defining features of cash for cars are the following:
- Zero seller’s or success fee. No amount should be charged to a seller.
- The vehicle must be picked up by the buyer.
- The picked up vehicle must be towed away free of charge.
- Payment does not have to be in cash but it must be made to the user in no more than a few hours after the sale is finalised.
- A delay in payment of more than 8 hours (working day) can not be classified as a cash for cars deal.
- A traditional vehicle auction is not a cash for cars.
- Wreckers buying vehicles for parts can only be called a cash for cars provider if they are able to satisfy criteria 1-6.
