If Metal Prices Keep Rising, Look for a Boom in Sawzall Sales

I love stories about the unintended consequences of rising commodity prices. (Here’s one, and here’s another.) Now Susan Saulny writes in the Times about another strange trend driven by high commodity prices: the rampant theft of cars’ catalytic converters, which contain trace amounts of platinum, palladium, and rhodium.

Levitt and I heard about this several months ago when we were interviewing a fascinating guy named Pat Lay who runs a very unusual auto-repair shop in Chicago. (I won’t go into what makes his shop unusual here since we may write about him soon.) When we asked Pat about scrap prices over the past several years, he called over a younger mechanic named Nick:

Pat: Hey Nick, what are these cars in weight — if you tow ’em across, what do you get for them?

Nick: The last one, the silver one, I think I got close to $300.

Pat: Just in weight. He does a lot of scrapping on the side. He’ll take the converters out and get $70 for the converters.

Nick: Depends. A lot of the Japanese are less; it ranges from $40 to $100 bucks apiece.

Pat: Just for the internals — the chemicals and the converter.

Nick: They just started having a real bad epidemic that people are making; they’re cutting cats off of people’s cars in the middle of the night.

Pat: We had a few people over at the lake front. They come out to start their car and obviously, there’s no exhaust system on it. We get underneath and somebody’s put a Sawzall in the center of the exhaust.

Nick: You could easily make in one night what we make in a month. Seven, eight of ’em in one night — 80 bucks, maybe 60 bucks apiece.

SJD: And then who buys them?

Nick: A lot of scrap places that do scrap metals. They take the insides out and they sell by the ton, so they offer a little bit more to you.

Last I heard, Nick was still working for Pat, although if prices keep rising he may be tempted to give up his day job.

Related: I haven’t read many articles lately about people who steal gas out of people’s tanks, even though the price of gas is historically high. Why not?

I am guessing that, although this does happen once in a while, it’s never been very popular since it’s just not practical to a) siphon off enough gas to make a lot of money, and b) find a willing buyer for used gas.