Junk Car Buying with Cryptocurrency

Why are we considering Cryptocurrency Payments for Junk Cars?

As Rusty’s Auto Salvage works toward the use of cryptocurrencies, we thought it might be useful to publish an article explaining our thought process. We have gone through careful and informed investigation around adding cryptocurrencies to the services we offer our clients. Hopefully other businesses will find this article helpful. If you have any questions or would like to join the discussion, please email us at [email protected]

Like everyone else, Rusty’s Auto Salvage management has been hearing the chatter about cryptocurrency. Back in January of this year we started having internal discussions regarding how we could benefit from the widespread cryptocurrency interest. Obviously, there is some benefit to using the new currency just to be included in the enormous buzz around the new form of investment and payments however, there are also drawbacks and concerns. These are some of the key reasons we have decided to add a cryptocurrency option for our clients:

1. Many of our buyers are in the international market. They purchase cars that we have obtained from our seller clients, refurbish the cars and then export them to countries where there is a high demand for used cars. In some cases, sellers can avoid import tariffs are imposed on new cars by importing older cars from the US so for exporters of junk cars there can be significant price advantage by exporting. We feel that if we can accept payment in the form of cryptocurrencies that the complicated issues surrounding moving money around the world and dealing with currency fluctuations can be avoided by transaction in one globally fluent currency that can be exchanged without paying high banking and wire fees.
2. For our seller clients, the clients we buy junk cars from, we think offering to purchase in cryptocurrency would offer an easy entry point into the new world of digital currency for people that would like to invest but are reluctant to take US cash out of their account to make their first investment. For many of our client the revenue from a Junk Car is “found money,” so the concept of starting a cryptocurrency investment portfolio.
3. We have also not overlooked the benefit of having our brand associated with the cryptocurrency craze. We have taken note that publicly traded companies that move into the cryptocurrency world, even if only by changing their name, have seen big movements in their stock price. Rusty’s is a privately held company and we are not looking for a boost in our company’s value but do think that by including cryptocurrency in our branding, we can increase the buzz surrounding our company.

We are not naive, we understand there are also risks and drawback to this decision. These are some of the concerns that have prevented us from making this move sooner.

1. Security, we will need to fully understand digital currency security. To trade quickly in cryptocurrency, we will need to hold a cache of currency that we can transfer to our clients. We are planning to bring a digital currency consultant who can help us understand the security implications and come up with a best practice plan to manage a digital currency wallet.
2. Our customers may need extra help from us to be able to accept cryptocurrency as payment. We are expecting that many of our seller clients, will be using cryptocurrency for the first time and may have no idea how to set up a digital wallet and receive funds. We plan to build out a page on our site to help clients make some choices. However, we are concerned that supporting our clients on the technical side will create more work for us and if something goes wrong with a client’s account we may experience blow back from that bad experience.To reduce the transaction volumes we will only pay client in cryptocurrency for transactions over $500 and we will only allow the full transaction price to be converted to digital currency as opposed to allowing clients to split a payment between Dollars a digital currency.
3. Finally, we are struggling with how to deal with the wild fluctuations in the currency's value. We are planning to mitigate the impact of value fluctuations by keep our in-house balance of cryptocurrency as low as possible. We will quote all purchased in US Dollars then calculate the digital funds to be sent to the client based on the value at the time of the transfer rather than at the time the price was quoted.
4. We will be making payments in Bitcoin, Ether, and Bitcoin Cash. We will send the payments to any wallet address. If a client does not have an address they can just open an account at Coinbase.com or Exodus.io and generate an address to send the funds to.

Who else in the junk car / scrap metal markets are promoting cryptocurrency?

Remechain is planning to launch a scrap metal exchange based on blockchain technology. This article from Coinspeaker, discusses Remechan’s plans. Their plan is to create a decentralized marketplace that cuts out brokers and middlemen and allows trading to and from any country. Their platform would provide real time price quote to allow for a more efficient market. The worldwide market for scrap metal exceeds $106 billion and Remechain feels their platform would overcome the substantial barriers to international trade in scrap metal including what the article describes as “widespread fraud.”

New and used car dealers have already moved into the bitcoin realm. High end car dealers are working with bitcoin to capitalize on the newly created bitcoin millionaires. Lamborghini of Newport Beach currently accepts bitcoin for their high-end cars. There are a handful of other dealers across the country who are also dabbling in Bitcoin including, Sam Pack’s Five Star Ford in Dallas and Chrysler, Dodge, Jeep and Ram in Kansas.

Rusty’s Auto Salvage would be pioneering the use of cryptocurrencies to pay sellers of junk cars. We are confident that if we get traction in this space that our competitors will follow. For now, the use of cryptocurrencies feels more like an experiment but if our clients respond digital currency could become a major part of our business.

What is Cryptocurrency?

If you have read this far and are scratching your head wondering what exactly cryptocurrency is and why all the excitement there are lots of resources on the web to help you learn. However, here is short summary of cryptocurrency.

Cryptocurrency is a decentralized digital cash system. Decentralized means that is it not controlled by any government and it avoids the modern banking system. Currency is exchanged directly between individuals with values being set in real time without government manipulation. Each “coin” is just a long string of 0’s and 1’s and encrypt the coin. Only the holder of the code has control of the currency. Because currency is traded electronically without banks or government involved it is essentially untraceable. While some people are drawn to the new currency because it is unregulated and untraceable, those same benefits also create risks for the users. If a thief can find your store of digital codes for your coins, then they instantly and untraceably become the owner of those coins.

Although cryptocurrencies are unregulated, they are recorded by a series of open source “peer” computers. Each computer records the entire history of a currency including, when it was created, and all the trade transactions that have occurred. However, the individuals making the trades are obscured using cryptocurrency.

The Plan for junk cars and cryptocurrency

We hope to roll out the digital currency option in the 4th quarter of 2018. We will start very slowly and only promote the cryptocurrency option for buying junk cars through our phone agents discussing the option with our sellers on the phone. Once we have worked out the bugs we will begin promoting the option our site and we are even considering an AdWords campaign targeting cryptocurrency enthusiasts. Like so much of the cryptocurrency world, the future of trading in junk cars by using digital currency is very uncertain be are determined to be a part of that future. We feel there is great potential in providing this great new service to our sellers and we believe our buyers will be excited to be able to make international transactions without using the traditional banking system.

If you are interested in selling you junk care anywhere in the US, check our sell junk car locations page for a location near your or just call our 888 number.