Cars in the scrapyard often end up crushed. Some of them end up there because of crushing debt:
According to a recent PEW study [pdf], one out of every nine title loans results in a repossession, with the titled vehicle eventually heading to auction.
And after that, maybe the car finds a new home, but maybe not:
One vehicle, a 1995 Chevrolet Blazer, currently shows 271,285 miles. Pulling up its history, we see it shows up at auction in December 2011 with 199,683 miles, then it’s sold with a lien attached in February 2013. Since it had almost 200,000 miles at the time, it is highly unlikely any traditional lending institution would have written a loan for it, meaning this loan was almost certainly processed by a subprime lender. The February sale comes during one of the bigger months for subprime and “Buy Here Pay Here” dealers as many potential customers are receiving tax returns that can give them enough money for a down payment on a new-to-them car.
The Blazer’s owner was immediately in the hole since they were likely taking out a loan with an annual percentage rate of 30 percent for a vehicle that was only worth its weight in scrap. We see three more liens reported on the vehicle with the last one hitting in October of this year. The vehicle’s owner could have taken out multiple title loans or refinanced his loan, the last one being too expensive to cover. Since the vehicle was not worth more than $300 or $400, they would have only been able to get a loan for $150 or so, which would have cost them double or triple the original amount once interest was added. The owner may have been in a tight situation or the car could have broken down, making default a more affordable proposition. Due to the mileage and condition, [the] next stop for this Blazer is likely a salvage yard.
Five will get you ten the guy who bought this Blazer in 2013 went scurrying to Yahoo! Answers to see if there was a chance he could plunge himself further into debt to get himself something newer. Not that it matters what anyone actually told him. (I started suggesting that people start pricing bus passes, a practice some would dub cruel and insensitive.)
Most of the other cars I checked on the run list followed a similar path where they spent a few years in the mainstream market before ending up at a subprime dealer. Some of them experience accidents that should leave them with a branded title, but there are loopholes that allow the title to be washed. Others live a long life with their first owners before reaching the subprime market. The second and third owners of these vehicles are usually underwater as soon as they buy the vehicle and the title loans just put them further into debt.
That Blazer, says the intrepid reporter, was “not worth more than $300 or $400.” What would a BHPH dealer have sold it for? I’m guessing $1999.