Every car part has its purpose and the catalytic converter is no different. Designed as a mechanical method of reducing engine emissions and related pollution to the air, these units have become a required part of an automobile in the United States. The laws are so strict, any tampering with a certified emissions system is required to be reported to the government by car mechanic businesses that find the problem. That said, unexpected forces have causes problems in an unforeseen way: the basic materials used to make catalytic converters have now become more valuable than the part itself.
What is a Catalytic Converter?
The catalytic converter was designed to catch and lessen the impact of vehicle emissions from the engine exhaust. First installed on a large scale in auto production beginning in 1975, the part was due to Environmental Protection Agency efforts to clean up air pollution. The installation is required in all combustion vehicles, including cars, buses, mobile construction equipment, and any other licensed gas-powered vehicles.
The emissions that travel through the converter still eventually get emitted; however, as they go through the converter their elements react with the materials in the part to become less toxic in the air than if they went directly out from the engine.
Black Market Pricing
In 2007 and 2008 commodity prices skyrocketed in the U.S. investment markets. Because many commodities were now linked directly to the market, their spot price or daily value skyrocketed as demand for investment purposes was willing to pay higher prices. This drove up the cost for such things as oil and gold.
Catalytic converters include commodity materials such as gold, palladium and even platinum. The amounts are not in big sizes. Rather, many times they are plated on to the internal parts of the converter to help it perform its function.
As commodity prices climbed, recycled parts and scavenging gained significant monetary value. Soon enough, catalytic converters were being sawed off cars by thieves and then sold to scrap metal dealers. They in turn sold the parts to businesses that removed the precious metals and recovered them. With prices shooting up for salvage payments, the rate of converter theft did too.
At the height of resale demand, converters that were stolen could fetch as much as $30 per stolen unit. The theft and precious metals compounded costs, driving the converter part so high. Now converters became needed for parts salvage and for replacement in damaged cars. A good thief could hit a parking lot and run off with 10 to 20 converters in a few minutes.
Repair Profits for Mechanics
The unlucky driver hit by a converter theft also has a replacement and repair cost to deal with. Repair costs range from $200 to $1,000 depending on the car and who does the service--not a cheap fix. With repairs average as much as 15 to 20 cars a day for some mechanics, regular industry demand began driving converter prices up as well.
The value of converters has dropped since many of the prices for commodity metals have dropped in terms of market worth. That said, the problem can occur again as long as there are thieves willing to do the job and valuable metals rise in price again.
- Photo Credit Image by Flickr.com, courtesy of Nam Nguyen
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