Damaged Cars Still Making Money
Nov. 20, 2019—One business man is making a profit off selling damaged cars and has turned drivers' misfortunes into a $1.9 billion fortune, reported Insurance Journal.
Copart shares have increased 80 percent this year. Driving the growth are technology advancements that have made cars more expensive to fix and thus more likely to be written off by insurers, as well as international expansion.
“There was a lot of concern that safety technology would reduce accidents and so there’d be less cars for auction — good for society, bad for Copart,” said Craig Kennison, a senior research analyst at Baird. But that didn’t account for the spread of smartphones, he added. “Cars may be safer, but drivers are more distracted.”
Copart has a relationship with insurers, including a recent agreement with Geico to sell more of the cars they deem too pricey to fix.
Copart's success raises the question about whether a body shop is sitting on a potential profit center.