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Internet spurs demolition derby with a wrinkle

Foreign-based online bidders are buying as many as one-quarter of car wrecks sold at Washington area auctions. Last year, 19 times more salvaged vehicles headed out of U.S. ports than three years before.
/ Source: a href="" linktype="External" resizable="true" status="true" scrollbars="true">The Washington Post</a

Think the Internet has changed your life? Try spending a day dealing with junked cars.

On a recent Tuesday afternoon, Roger W. Moore is shopping for wrecks. They've crashed on the region's roads and been towed to a sprawling auction lot in Waldorf, almost 30 miles south of downtown Washington.

Moore isn't actually at the auction lot. No reason to be.

He is down the road, inside his office, placing bids online. Drawing on a Marlboro, the 44-year-old stares at a flat-screen monitor, clicking away.

Before him: photos and descriptions of the smashed cars that attract bids from countries that two years ago he couldn't have imagined bidding against: Ukraine . . . Lebanon . . . the United Arab Emirates . . . Nigeria . . . Bolivia. Bidders from countries such as these have figured out how to buy Washington's damaged cars, ship them overseas, repair them and sell them for a profit.

On his screen, Moore spots a wreck he wants, and pounces: a 2000 Toyota Sienna minivan, with part of its front mangled after 103,813 miles on the road.

He wants it for the same reason he always wants wrecks, to tow them to one of two area salvage yards -- commonly but less accurately known as junkyards -- that are owned by his family. One is in Clinton, the other in King George, Va. When the wrecks get to the yards, workers pull out valuable parts such as motors and transmissions, store them in warehouses and over time sell them to area mechanics.

Foreign buyers push up prices
With all the foreign buyers, pushing up prices, Moore generally must pay more for wrecks. He clicks $950 for the minivan. He grows nervous that he's offering too much.

Two thousand miles south, Henry Lara keeps clicking. The Honduran has had a good day, winning four vehicles from Waldorf -- a Kia Rio, Mazda 626, Hyundai Sonata and PT Cruiser. Lara, a 32-year-old former wholesale chicken salesman, runs an auto repair shop and buys 25 to 35 U.S. cars online a month, most from around Washington.

With slightly more than half of them, he said, a middleman chops them up for parts and gets them into containers on an ocean barge to Honduras. The rest are shipped to him whole, so he can rebuild and sell them.

Lara doesn't speak English. But he can follow the numbers. He clicks $1,050 for the minivan.

Moore stares at the bid, his finger hovering over his mouse. Going once, going twice . . . sold, to the Honduran.

Foreign-based online bidders such as Lara now buy as many as one-quarter of the wrecks at Washington area auctions. It is the inexpensive labor overseas -- foreign bidders can pay to fix a car that is declared too expensive to fix in the United States -- that helps fuel all of this. Last year, 19 times more salvaged vehicles headed out of U.S. ports than three years before, according to PIERS, a New Jersey-based import/export data tracking service.

Such sweeping forces of trade and technology bear down daily on Moore, a third-generation salvage man who remembers running around the family's Prince George's County operation as a 10-year-old, looking inside trunks for odd things and fishing in a nearby creek. Recently divorced, he spends his spare time riding a Harley and tending flowers and bird feeders around his home in Southern Maryland.

Even pre-Internet, running a salvage yard was more than Sanford & Son. At Moore's King George operation, workers who pull parts off the newly arrived wrecks log the parts into computers. Then they use a forklift to carry gutted wrecks to the back yard, where the hulks wait to supply more parts as needed. Eventually, after the wreck has exhausted its usefulness, it is fed into a giant outdoor crusher, with the resulting flattened, rectangular cube sold to metal recyclers. Because the wrecks can sit for up to three years, Moore aims to buy vehicles that will yield three times what he paid for them -- to make a profit.

But with online bidding, Moore suddenly must square off against quick-moving competitors such as Algirdas Griusys, 46, of Gargzdai, Lithuania.

He is one of more than 100 estimated salvage importers in his country, working from a home office with a full-time assistant. They buy 50 to 55 U.S. wrecks a month, bidding at an array of auction lots in the United States. He rebuilds them and also resells them as is. "That way, I can move more cars."

Griusys keeps a few of the rebuilt vehicles himself, such as the 2000 Honda CRV that crashed in Elkridge in August.

The Lithuanian said he has had trouble recently finding deals in Waldorf. "Too many foreign buyers," he said over the phone. Griusys adjusts, and on the same Tuesday that Moore and Lara square off over the minivan -- after trying at Waldorf -- he clicks his way over to auctions in other cities, picking up eight cars by day's end.

Compared with Griusys and Lara, who are likelier to sniff out more online deals at other Washington auctions, Moore spends less time on the Internet, doing much of his bidding by instinct. He also prefers being a jack-of-all-trades at his salvage yard.

"On a day like today," he said this week, citing perfect afternoon weather, "I might go out and crush cars."

Still a good place to be a salvage dealer
In one way, the Washington area remains a good place to be a salvage dealer: Lots of people wreck lots of nice cars. In 2005, more than 30,000 area vehicles were declared a total loss as a result of accidents, according to records kept by the Property Casualty Insurers Association of America.

Nor is global trade all bad for local salvage yards. Growing economies in Asia, for instance, have helped push up the price of recycled metal. Moore now gets more than $100 for a crushed car.

Insurance Auto Auctions Inc., based in Illinois, owns wreck auction lots in Brandywine, Laurel and Fredericksburg. All told, the company said, it has bidders in more than 60 countries who have helped push prices at the auctions up by an average of more than $300 per unit compared with two years ago. California-based Copart Inc. owns the auction lot in Waldorf. The company said in its most recent quarter, it saw a record average selling price.

It is in this environment that Moore now bids on cars on Tuesdays, having an average of five weekly purchases from the Waldorf lot over the past 12 months, according to records he supplied.

He generally starts getting ready on Monday by printing out a list of cars that will be bid on. For the April 4 auction, he has approximately 680 entries to look over. He makes small marks next to about 20 that interest him -- generally low-mileage wrecks that he knows are drawing attention for their parts from area auto mechanics. Moore then logs on to the Waldorf Web site, studying pictures of the 20 wrecks to scope out the damage.

At noon, the auction begins. Moore sits on a stool behind the front counter, working on his computer. All around him are the sounds of salvage: salesmen calling out parts that body shops need, customers arriving to pick up parts.

The vehicles pop up on his computer -- three at a time in three computer windows. Keeping track of them all leaves no time for lunch. A fish sandwich and french fries, inside a foam container next to his keyboard, grow cold.

Moore tries to get a wrecked Ford Ranger but is topped by a Guatemalan. Minutes later, he scores a six-year-old Cadillac Escalade for $1,850 but later is bested by a Latvian on a $725 Ford van.

On some cars, Moore can only watch, slowly munching his food. A Canadian bidder snags a 2005 BMW Z4 for more than $13,700, besting a Polish bidder. A Lithuanian outduels a countryman, paying $5,500 for a Volvo. During such bidding breaks, Moore sometimes comments aloud about world geography. A week earlier, when a $4,600 bid from Bosnia popped up, he offered an explanation noting the time difference. "That's a Mercedes; they wake up over there" for that brand, he said.

Bids  from faraway states
As the auction goes on, it isn't just bidders from faraway countries pulling cars out of Waldorf. It is from faraway states -- California, Texas and Illinois. These buyers probably fall into two categories. They are large enough to afford to load the wrecks onto trucks and haul them across states, or they use technology better than Moore to automatically pinpoint where the wrecked gems can be found -- and whether they are worth paying big hauling fees.

Moore stays local, bidding largely on feel. "There's a lot sharper out there than me," he says quietly. "But sometimes I do okay just going by instinct."

He ends up buying more cars than usual, having purchased nine by late in the bidding. Up on the screen, he sees a car he wants, even though he hadn't previewed it: a 2005 Toyota Scion xB with only 27,810 miles. Moore clicks away, dueling with a bidder from Kentucky. He wins it, for $1,950.

"I could be in trouble," Moore says, clicking through the digital images. John Gannon, a salesman wearing a Nationals cap, walks over and looks at the screen. They are concerned that the engine may have been sprayed by a fire extinguisher.

Two weeks later, the car has been delivered to their salvage yard. It's in better shape than they feared. The doors look good. The back hatch is good. Motor and transmission are good. Because the car is so new, other salvage yards are less likely to have these parts in stock. Over the next two years, if all goes well, they will sell $6,000 worth of parts off it.