News

Have you ever wondered why the spare parts from the car manufacturer are so expensive compared to those from a car dismantler? No? Well here is a little economic theory as to why.

 

The car manufacturer sells a car but with that model the manufacturer also needs to supply spare parts for when components fail. If they do not provide the replacement parts then the customer satisfaction with the car will fall as it will be perceived as inferior. Poor public perception will adversely hit sales of the car, so spare parts will need to be provided.

 

The manufacturer is then faced with quite a complex challenge of how to predict how many & of what types of part to produce, for how long, and where and how to supply them. The manufacturer is taking a large risk in this process as they could end up with many parts produced, stored for a long time and potentially with no buyer. Here is a pleasant formula showing this, it was developed way back in 1918 by Mr E W Taft:

This is about the average ordering and holding cost as a function of time where.

F = Holding Cost, D = Demand Rate, K = Setup Cost, T = Cycle Length, x = Demand Rate/Production Rate.

 

In short, the manufacturer is taking decisions on variables that they try and predict but cannot always control i.e. how often will the spares be demanded and for how long. They are taking a risk in trying to provide a service that protects the perceived value of their product.

 

A way of minimising this risk and cost is to try & ensure that auto part life is suited to the life cycle of the car [excepting consumables like exhausts, brake pads etc].

 

Car Dismantlers’ Advantage

 

Here is the potential pay off for car dismantlers and the buyers of car salvage: If you can source auto parts that are not at the end of their economic life cycle without having had to manufacture them and store them for long then you can sell/buy them at a discounted price. You may not have the manufacturers warranty for the salvaged spare part but you are paying a discounted price for a unit that was designed to last. It would also be a part that was manufactured for that car – it wouldn’t be an imitation. Some car dismantlers even provide a guarantee of up to 90 days.

 

Find the Car Parts you need at 1st Choice

 

Getting a search done at up to 250 breakers and scrap yards at one go could greatly improve your chances of sourcing the quality parts you need. It will probably save you a great deal of time and money. Let us help your search for cheap car spares. Click on the link below to start your search or call 0905 235 6000 to find out more.