Air-quality regulations decrease vehicle prices

Some Auctioneers and sellers of used diesel vehicles and equipment say regulations designed to improve air quality in California have slowed profits, but at least one Auctioneer has turned a potentially negative scenario into a positive one.

As part of a strategy to reduce toxic particulate matter emitted by heavy-duty diesel engines, the California Air Resources Board has implemented the Diesel Risk Reduction Plan. The plan, which was developed with input from industry and the public, is designed to reduce toxic pollutants by 80 percent by 2020.

To help achieve this goal, CARB has issued several regulations for on-road and off-road diesel vehicles that would require the phase-out of the older, dirtier vehicles over the next 10 years.

That ruling has cut into profits for firms like Fischer Auction Co., El Cajon, Calif., which sells diesel generators and used vehicles, such as street sweepers, vacuum trucks and sewer trucks, for the city of El Cajon and other local entities.

Many of the semis the company sells are worth only $4,000 to $5,000, says Fischer’s Jeff Bloom. The cost of retrofitting them to make them compliant with air quality rules can top $10,000.

Consequently, instead of selling the vehicles to local buyers who put them back into service, the firm must sell them to dealers who dismantle them or to buyers in other states or in Mexico.

As an equipment seller and appraiser who sometimes works for auction houses, Harold Foster, GPPA, of Foster Appraisal & Equipment Co., Yuba City, Calif., says he faces a similar situation.

His business has “taken a hit,” he says.

The regulations have driven down the prices of good equipment and made a lot of it unusable, he says.

“It’s put a lot of people out of business,” he says.

At first, the CARB rules had a significant effect on business at U.S. Auctions in Upland, Calif., says the company’s Armando Camarena.

The company auctioned trucks and other equipment for cities and public utilities that typically had only 60,000 to 100,000 miles on their odometers and often brought in up to $45,000.

After the CARB rules took effect, the typical take dropped by as much as 40 percent.

But Camarena reversed that trend by turning to online auction services.

Now, he has built a base of more than 25,000 buyers throughout the U.S., Canada and Mexico and managed to bring his average selling price up at least 30 percent.
Read the complete story in Auctioneer magazine.

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