What is a core charge? In the auto repair industry, there is often confusion about what a core charge is and when it is applied.
Considering how common core charges are in the diesel engine industry, a surprising number of our customers ask us that question every day. If you are also one of those people, we’ve put together this handy guide for something you should probably familiarize yourself with if you’re planning to buy replacement parts.
What is a core charge?
A core charge is a form of deposit held for the return of the used part. Core charges are set by the manufacturer or supplier and are based on the value of the materials in the part or the reusability of the old part. The core charge is added to the price of a part to encourage the return of the old part.
How the core charge works
- The part you are purchasing contains a component that is recyclable
- The Core Charge deposit is charged at the time of purchase
- When the recyclable component from your old part is returned to us, the charge is refunded to you
- If you have the old part with you at the point of purchase, you will not have to pay this charge
Manufacturers really do want your dirty junk
Why would any manufacturer want a broken turbo (or any type of part with a core charge)? Because that’s the only way they can make remanufactured parts. There’s a reason they’re ransoming your old part.
The core charge is an amount that can cover what it would cost for them to buy an old, broken part like yours. This way, they don’t lose out on the opportunity to remanufacture another part and sell it again.
Essentially, you’re replenishing their stock, so that they can keep offering remanufactured parts. This is not only good for them, but for you, as it provides you with a less expensive alternative to buying new parts.
Core charges don’t make remanufactured parts more expensive than new parts
Or at least they shouldn’t. You might find yourself getting sticker shock when you see the core charge applied to your purchase, but it’s important to remember one thing: if your core is accepted, you get the core charge credited back to you.
The only case where you would not get the core charge back is if you return an unacceptable core. Even then, most times the part cost and core charge still come to be less than the cost of a new part.
When buying an item with a core charge, check the manufacturer’s core return policy. Some manufacturers are more particular than others. For example, we source from one cylinder head manufacturer that has a 100% core return acceptance policy. This means that they will accept any used cylinder head you send back as a core, as long as it’s the same part as the one you bought from them.
But not every manufacturer has that policy. We also source from a fuel injector manufacturer that only accepts cores that have 3 main components in good condition.
Picky is good
As irritating as it is to not get your core charge back, it’s actually a good thing that manufacturers are picky about accepting cores. The remanufactured part business is based on having good parts to rebuild.
Going back to our fuel injector manufacturer, one of the main components that needs to be in good condition is the injector tip. Tips are one of the components that can’t and shouldn’t be remanufactured, because they need to be incredibly precise.
If the manufacturer were less picky about what they accept, they would compromise the integrity of the parts they sell, and you would no longer be getting as good of parts.
What is a core charge on used part and why?
The reason is that many parts we sell are rebuildable or recyclable, so to insure that we get the old part back we have a minimal core charge. When you bring your old part back (core) we give you those monies back in full.
But from starters and engines, to damaged wheels or radiators, its just a lot smarter and cheaper to reuse or recycle that part than it is to manufacture a brand new one.
An every day example is that we used to just throw our old bottles, cans, cardboard etc into the trash and then it was taken to a landfill. Now most of us take those same items, place them in a container and push it to the curb every week to be recycled.
Auto recyclers are doing the same thing only with components that just a few years ago were also considered trash or scrap, but now have value.
What if the customer wants to keep the old core part?
The customer may request to have the old core part returned to them. Parts that are sold on an exchange basis and parts that must go back to the supplier under a warranty or core arrangement (such as a battery) are not required to be returned to the customer.
In these circumstances, the customer must be offered the opportunity to see the replaced parts. Any replaced parts that cannot be returned to the customer must be recorded on the invoice.
What is a core auto part?
A core auto part is a part or a component of an auto part that can be rebuilt and sold as a remanufactured part or a part that can be recycled for its materials. Common core parts may include batteries, water pumps, alternators, brake master cylinders, and air conditioning compressors.
The return of core parts to the manufacturer lowers the cost of the auto parts and related auto repairs and keeps hazardous materials out of landfills.
Is there a core charge on both new parts and remanufactured parts?
There may be core charges on remanufactured parts as well as new parts since the materials and the core part itself have value to the manufacturer regardless of whether the replacement part is new or remanufactured.
What if the old core part is damaged beyond repair?
Many auto parts carry a core charge regardless of the usefulness or perceived value of the old part. For example, replacement batteries, turbo chargers, and bumper covers often have a core charge added to the price even if the original part is damaged well beyond the possibility of rebuilding.
Above is information about What is a core charge? that we have compiled. Hopefully, through the above content, you have a more detailed understanding of How the core charge works? Thank you for reading our post.