Good morning. This is Saul here at Saul’s Automotive to talk with you a little bit about some of the recent severe weather events that have been happening and how we’ve seen these changes affect our industry and what we can do to help.
Over the past couple of months, there’s been a couple of hurricanes that did some very serious damage along the coast in parts of Texas. When we saw what was going on and we saw how serious the effects were and how delayed some of the responses were, we took matters into our own hands, and we supplied 10 different supply trucks with $500 apiece of product to go towards the area from all different directions. We found friends and family that lived within a 500-mile radius to make the trip and allowed them to contribute as well in any way so that we could help fuel and fund their journey to bring goods to people in need.
While we were able to give back to the community in this way and truly show at least a little aspect of acceptance and responsibility for the greater good of the people, we also saw something very interesting happening. We saw that, as the floodwaters were receding and as people were starting to gather their belongings, gather themselves and gather their composure, that one thing was also being gathered: all of the cars. All of the cars were being taken. They were all being towed, all these insurance-claimed cars. And we didn’t know where they were going. We just saw them leaving the city. So having followed those and having seen that they all transported all these motor vehicles to a speedway in Texas, hundreds of thousands of cars that were all totaled, flood-damaged cars, and they were all in the same spot.
And we couldn’t figure out why. What are they doing with them? And then we saw a sign saying that there was gonna be an auction, and then we saw who was coming. LKQ, also known as Like, Kind or Quality, a major, major junkyard in the United States is looking at purchasing these vehicles. And LKQ is a major supplier for insurance direct repair program facilities. Now, you’ve heard us talked about insurance DRP programs before and why they’re a bad idea, so just a small recap on that. You get in a car accident. It doesn’t matter whose fault it is. Either insurance company says, “You should go to this list of places that we sleep with, because we sleep with them to save us money jeopardizing your safety by doing repairs cheaper using junkyard parts in the shoddiest ways we can just to save our dollar value.”
You as a consumer intentionally go to your own repair facility as the law dictates you have the choice to here in the state of Colorado so that you get the repairs done properly, maybe at a really top-notch facility like Nylund’s Collision Center or the like. As a result, you get the job done right, but the majority of the time, the job isn’t done right. Over 75 percent of collision repair in this country is completed by an insurance company through a direct repair program facility, meaning they’re intentionally using a cheaper part many times from junkyards onto your vehicle to save their cost. Now, we see this auction, and we see that the insurance company who just paid all of these millions of dollars for these losses of these cars who known owns these cars — they just purchased them, essentially. They just paid for them from the owners. The insurance company now owns these cars.
Well, the insurance companies are now gonna auction these cars off to LKQ. Now LKQ is gonna take those cars that were underwater in saltwater, and they’re gonna put them in junkyards, and then years down the road, when another motor vehicle gets crashed and your insurance company sends a direct repair program facility to do the repair on your car — those parts are gonna come from those cars. Now any motor vehicle component that’s been subjected to saltwater submersion is not safe to be reused on your vehicle, whether it be a motor transmission that gets destroyed internally or even a body part that may just look cosmetically different. It has physically rusted and corroded the surface. It weight less than it did. It no longer has the structural integrity of what it once was, and it will not crumble in the same way. Your safety may very well be jeopardized by such. So we were very concerned when we saw all of these cars getting ready for auction and LKQ lining up as a buyer.
So now we’ve got an insurance company that is gonna write off their loss, sell these cars to try and recoup some of their loss, and they’re gonna sell them to a company that’s gonna sell them right back to them. And they know this, so, from a relationship standpoint, it sounds like there might be something fishy going on here. Not only is your safety gonna get jeopardized by it, but there’s a potential that some of these cars might actually end up back out on the road. A matter of fact, we’ve seen a few already. We actually heard the other day from another local dealer that they had a 2012 F350 come onto their lot. Had a Houston title. They’re looking for information for it, cuz it came in as a trade. Everything looked great. When doing the inspection on the vehicle, we noticed mud around the front hub assemblies, so we removed them, and saltwater came out of the axle tube. The vehicle had obviously been submerged at some point and has irreparable damage to it that cannot be repaired and is already back out, sitting in a dealership lot, waiting to be sold.
Now there’s a few important lessons behind this. One, you should always have a vehicle inspected by a third party, prior to sale or post-sale. Ourselves or anybody else. You always need to have an inspection done to ensure you’re not purchasing a vehicle that was used in this. Two, you need to be vigilant as a car owner. If your vehicle’s ever in a collision, you need to make sure that you only get new parts from the dealership put on your car and that these parts from these cars don’t end up on yours. And three, you need to speak loud and let these insurance companies know that this is not acceptable behavior. The pictures of these hundreds of thousands of cars at the Texas Motor Speedway went viral. They were shown on CNN. They’re now around the world so that everyone can see what’s going on. These cars are gonna be auctioned.
They’re gonna be sold to these junkyards, and they’re gonna put those parts right back on your car that’s gonna get crashed and repaired. If you have a vehicle that’s in a motor vehicle accident, you need to look out for this. If you have a vehicle that’s getting purchased or sold, you need to look out for this, but I reiterate: The most important thing we can do is speak loudly and let these insurance companies know that these cars are junk. They were totaled for a reason, and they shouldn’t be on the road.