Junked cars cost taxpayers real money

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July 12, 2004 // UPDATED 2:28 pm - April 25, 2007
By: Scott Russell
Scott Russell

Ten thousand abandoned cars per year -- 10,000! -- rip $3.6 million out of an already-depleted city budget

On a cool, windy June morning, auctioneer Mark Friederichs walks counterclockwise around

the Minneapolis impound lot, selling abandoned cars one by one.

It is a weekly event. Two dozen scrap metal and used car parts dealers follow Friederichs around the lot; in a series of fast-paced winks, blinks, waves and nods, they buy more than 70 unclaimed cars. It takes less than a half hour to finish the auction -- less than 30 seconds per car.

This may seem like a good deal for the city. In return for rusty, beat-up and mostly inoperable vehicles, it gets a little spare change for its ailing coffers: $70 for a 1989 Plymouth van, $100 for a 1987 two-door Saab. In all, sales totaled $8,200.

In fact, this auction was a lousy deal for taxpayers.

The average $117 paid per car didn't come close to recovering the $403 it cost to tow, store and sell each car, said Mike Sachi, parking and skyway systems engineer.

And the impound lot gets saddled with a staggering 10,000 abandoned cars a year -- an average of 27 cars per day, Sachi said. The city loses $3.6 million a year on abandoned cars, according to a June 8 city parking fund report.

That's money that could otherwise bolster Police, Fire and Public Works spending. For instance, $3.6 million could pay for 48 police officers in a department that cut 100 officers last year.

Abandoned cars also fuel the impound lot's looming space problems. The impound lot has 1,600 spots in the summer, Sachi said. On an average day, the lot holds 1,000 cars, leaving 600 spaces to spare. However, Van White Memorial Boulevard -- a new north-south connector -- will cut through the impound lot and take 500 spaces.

The city is now taking action to reduce the junk car burden, Sachi said.

Impounding your tabs

John Wertjes, the city's assistant director of traffic and parking, said other states have forced people to pay the tow and storage fees on abandoned cars.

Some states won't let people relicense new vehicles, get a new driver's license or even renew their tabs until they pay off debts associated with abandoned cars, he said; Minneapolis could lobby for similar laws.

Sachi said the city could also hire a collection agency to recover tow and storage costs.

Using collection agencies, Hennepin County has achieved a 33 percent recovery rate on unpaid tickets, he said. If the city did as well, it could recoup $1.2 million more annually, based on 2002 data.

The city has already started ratcheting up the pressure on abandoned-car owners. Under existing state law, the city can deny people access to their impounded cars after 15 days. The city has been lenient in the past, but not anymore, said Scott Wellan, a parking systems analyst who works at the impound lot.

"You can't just come in and get the stuff out of your car," Wellan said. "You will have to get the car out of here."

Other revenue-boosting ideas include improved auction advertising and public service announcements to educate people on car-disposal options, such as charities or recyclers.

Sachi said the basic message boils down to this: "Don't leave your junk with us. We don't want your junk."

What am I bid?

Don Pedlar, supervisor of inspections and towing, said when cars come into the impound lot, the city mails a letter to the registered owners telling them if they don't get their car in 15 days, it will be sold at auction.

Sometimes, it appears owners don't mind -- they can't pay the fees, or they simply didn't want the car anymore.

"Word gets out that if you leave your car on the street, the city will take care of it," Pedlar said.

Wellan said a police garage mechanic sorts out which cars to sell at public auction and which ones are sold to dealers for parts and scrap.

(The city used to sell all the cars at public auction, but they kept getting the same junkers back, Wellan said.)

In 2002, the city sold 11,017 cars at auction, or 26 percent of all impounded cars, city data said. The city sold 1,178 vehicles at the monthly public auction for an average of $545 each. The city sold 9,839 at the dealers' parts and scrap auction for an average of $42 each.

Scrap prices have risen since 2002, so the city now gets more money per junk car, Wellan said, about $60 to $65.

The 70-plus cars sold at the June 24 sale was a relatively small number, he said. The abandoned-car numbers jump after a snow emergency or a city street sweeping.

Bidder No. 21, Paul Perko of Perk's Auto in St. Paul, said he comes looking for Toyotas in particular. "I go after motors and trannies," he said.

Prior to the auction, Perko eyed a beat-up Ford Custom 350 pickup truck with a tow-truck rig. He estimated it would sell for $500, but ended up buying it later for a mere $125. He also bought a 1986 Toyota for $375.

(Bidder No. 102, a man in a red ball cap, bought the most cars, but declined an interview.)

Roger Christiansen of Christy's Auto Wrecking in New London spent $400 for a Dodge Intrepid, the only car he bought.

"I was planning on getting more. They didn't have as many this time," he said.