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Auto Recycling Playbook

High-level plan for the vehicles Scott Recycling will acquire, dismantle, and sell through parts and retail flips. This document is the operating reference for buying discipline, target inventory, and dismantling workflow. It is intentionally narrow — depth over breadth, repetition over variety.

Strategy at a Glance

We buy a short list of high-volume, high-interchange vehicles repeatedly so that inventory compounds, technicians specialize, and sell-through stays high. Every vehicle has three possible exit paths, and we underwrite each purchase against whichever is least favorable:

  1. Retail flip — fix and resell as a complete vehicle
  2. Parts-out — dismantle and sell assemblies through Car-Part Pro, eBay Motors, and local channels
  3. Donor swap — combine two vehicles of the same platform (one mechanical problem, one cosmetic problem) into one sellable unit

The scrap hulk at the end of the chain is near-zero cost because we operate our own scrap line. That's the structural advantage that makes the math work.

Age and Condition Rules

  • Maximum age: 10 years. We do not buy pre-2016 vehicles for this program.
  • No pure scrap plays. If the only exit is scrap, the labor-to-revenue ratio is wrong for this program and the vehicle belongs on the regular scrap line, not in dismantling.
  • Title policy (see detailed rules below) applied before any bid.

Target Vehicle Tiers

Tier 1 — Core Repeat Inventory

These are the vehicles we buy every time at the right price. Standing pull orders at auction, pre-approved budget, standardized teardown templates.

Vehicle Generations in scope Notes
Ford F-150 2016–2023 #1 truck in TN. Aluminum body. Tailgates and beds drive revenue.
Chevy Silverado 1500 2016–2023 Two generations — 2014–2018 and 2019+. Do not cross-shop.
GMC Sierra 1500 2016–2023 Shares interchange with Silverado.
Ram 1500 2016–2023 DS (2013–2018) and DT (2019+) are distinct platforms. HEMI demand evergreen.
Toyota Tacoma 2016–2023 Exceptional retail hold value and parts demand.
Toyota 4Runner 2016–2023 Low volume, legendary sell-through.
Jeep Wrangler (JK/JL) 2016–2023 Aftermarket-obsessed buyer base. Every part sells.
Jeep Grand Cherokee (WK2) 2016–2021 V8 demand, long interchange.
Chevy Tahoe / Suburban 2016–2020 High-VIO SUV.
Ford Explorer 2016–2019 High-VIO SUV.

Tier 2 — Japanese Cars (Opportunistic Flip-Focused)

Limited slots — not more than ~20–25% of inventory. Bought for the retail-flip upside, not for parts-out margin. These are the vehicles where the donor-swap play (Path C) earns its keep.

Vehicle Generations in scope Notes
Toyota Camry 2018–2023 (XV70) Blown engines swap easily. Retail buyers trust them past 150K miles.
Honda Accord 2018–2022 (10th gen) 1.5T and 2.0T swaps are straightforward.
Toyota Corolla 2019–2023 Tight margins — only at clear steals.
Honda Civic 2016–2021 Strong TN retail demand.

Tier 3 — Everything Else

Filtered off the normal pull. Only surfaces if it clears both gates:

  1. Combined retail-flip-or-parts-out expected value ≥ 3× acquisition cost
  2. Same-day underwriting decision possible — if you can't immediately see the exit path, walk

This keeps us disciplined without being religious. A $300 running Camry that needs a $60 battery still gets bought. An $800 Fiat with a blown CVT does not, regardless of how "cheap" it looks.

Intentionally Excluded

  • Compact cars (except the Tier 2 flip list) — thin parts-out margins
  • German luxury — slow parts-sell-through, finicky buyers, fails "buy the same thing over and over"
  • Hybrids and EVs — battery liability, thin tech bench, regulated disposal. Revisit in three years.
  • Anything pre-2016 — violates the age rule and brings rust + electronics failures that eat labor
  • Orphan brands (Pontiac, Saturn, Mercury, Suzuki) — dead inventory

Buying Discipline (Max Bid Formula)

At the auction lane or on a walk-in buy, the maximum bid is:

Max bid = MIN of:

  • Path A (retail flip): Retail resale value × 0.55
  • Path B (parts-out): (Assembly catalog value × sell-through) + scrap hulk value
  • Path C (donor swap, Tier 2 only): Combined retail flip × 0.50, only if a donor candidate is already on the yard

Taking the lower of the applicable paths is what protects us. We never end up in the scenario where "I hoped to flip it but had to part it out" becomes a losing trade.

Sell-through assumptions for Path B:

  • Top 5 assemblies (engine, transmission, transfer case, tailgate, bed): assume 50% sell-through
  • Next 10 assemblies (doors, seats, wheels, cluster, radio, front clip, etc.): assume 25%
  • Everything else: effectively zero — model as scrap

Title Rules

Written, non-negotiable, applied before bidding:

  • Clean title — any path, including retail flip
  • Rebuilt / reconstructed — flip path allowed with disclosure and discount
  • Salvage — parts-out only, no retail flip
  • Flood — parts-out only, no electrical assemblies resold
  • Junk / non-repairable (certificate of destruction) — parts-out only, cannot be retitled
  • Bonded / no title — case-by-case, know the TN process before bidding

Every vehicle gets an NMVTIS pre-bid check ($3/report). No exceptions. A "clean title" vehicle with a prior salvage brand in another state will destroy a flip deal.

Dismantling Workflow

Intake

  1. Cats off first. Catalytic converters are removed immediately upon intake and stored in a locked cage. Sold to a specialist refiner, never scrapped with the hulk.
  2. VIN and title verified against bid documentation.
  3. Path assigned — flip, parts-out, or donor. Written on the intake tag.
  4. Photos taken before any teardown.

Teardown Standard

For each Tier 1 model, a one-page laminated teardown template lives in the bay. It covers:

  • Order of operations (which assemblies come off first)
  • Standard bin assignments
  • Required photos per assembly
  • Inventory-tag format
  • Known gotchas (harness clips, hidden bolts, fluid capture)

This is the single highest-ROI operational investment. Standardized teardown cuts dismantling time 30–40% and produces consistent part quality that buyers trust.

Top Assemblies to Inventory (per vehicle)

The 10–12 assemblies that drive ~80% of parts-out revenue:

  1. Engine
  2. Transmission
  3. Transfer case (4x4 only)
  4. Front / rear differentials
  5. Tailgate
  6. Bed (pickup box)
  7. Doors (front L/R, rear L/R)
  8. Front clip / headlights / grille
  9. Wheels + tires (as a set)
  10. Seats (front buckets or bench)
  11. Instrument cluster
  12. Infotainment head unit

Core Parts

Starters, alternators, A/C compressors, steering racks, and cats have core value — rebuilders pay for the old unit. Cores are tracked in a separate bin and sold monthly. At volume, this is $50–$200 per vehicle we would otherwise leave on the table.

Do-Not-Resell List

Safety-liability parts are not resold regardless of condition:

  • Deployed airbags (or any airbag from a flood / fire vehicle)
  • Used seatbelts
  • Used tires over 6 years old (DOT date code)
  • Child seat anchors from collision vehicles

Listing and Sales Channels

  • Car-Part Pro — primary channel. Nationwide visibility to body shops.
  • Car-Part.com free listings — baseline, always populated.
  • eBay Motors — high-value assemblies (engines, transmissions, clusters, head units).
  • Facebook Marketplace — local/regional, fast-moving parts and wheels.
  • Retail flips — listed on the website, Facebook Marketplace, Cars.com.

Storage and Cycle-Out Rules

Parts have an economic shelf life, not a physical one. The rule:

  • 0–6 months: full price
  • 6–12 months: first markdown (15–25%)
  • 12–18 months: aggressive markdown (40–60%)
  • 18 months: cycled to scrap, slot freed for new inventory

Without a cycle-out rule, the yard fills with slow-moving inventory and buying capacity seizes up. This rule is enforced on a calendar, not on judgment.

Compliance Notes

  • TN dealer license required if retail flips exceed the annual personal-sale threshold. Verify current threshold before running flips through a personal name.
  • NMVTIS reporting obligations apply to junk/salvage vehicles — required monthly filings.
  • Environmental compliance: fluid capture, tire disposal, and battery handling follow the procedures in Environmental Compliance.
  • Catalytic converter records — TN requires seller records; keep the locked-cage intake log auditable.

What Success Looks Like

  • 80%+ of inventory is Tier 1 repeat models
  • Parts sell-through on top 5 assemblies ≥ 50% within 12 months
  • Retail flip margin ≥ 20% gross on fixable vehicles
  • Donor swap margin ≥ 30% gross on Tier 2 combined builds
  • Zero emotional buys on Tier 3 vehicles — every non-core purchase is math-justified in writing