Copart: Salvage Yard Operations

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

This interview is about trying to understand how a salvage yard works at Copart. My first question would be: if Copart just acquired a raw piece of land and you teleport me there, what would need to happen for this land to be transformed into a salvage yard?

Naturally, costs vary significantly across the US. For instance, expenses can be 50% higher in one state compared to another, and zoning issues also differ. However, let's assume you have land that is properly zoned for a salvage yard. This would save you the time-consuming process of rezoning. If everything is in order and you're ready to commence construction, you would first need to clear and level the land. Depending on the type of land, you may need to add about four inches of large rock to support the weight of the loaders and cars. You would also need to erect an electric fence, construct a building, and pave the area around the building. These are the primary tasks involved in setting up a salvage yard. The yards I have been involved with, which we refer to as greenfield projects, typically take about ten months to complete, assuming everything is ready for construction.

As for your question about capital expenditure, it can vary significantly. We have yards ranging from 15 to 160 acres, so the costs can be substantial. Also, the cost of land can differ greatly. For instance, land in California is ten times more expensive than in Mississippi. On average, you can expect to spend half a million on the building and two to three million on developing the land. As for the size of a typical salvage yard, it's around 30 acres.

Often, people would approach us with land they believe would be suitable for a salvage yard. My first question would be about the size of the land. If they say it's 12 acres, I would dismiss the idea. However, if they have 40 acres, then it piques my interest. There's also a significant difference between buying an existing salvage operation or auto auction and starting from scratch. With an existing operation, much of the work has already been done, although you may need to add rock and make other adjustments. But buying an existing business is obviously a completely different scenario, as you would have to pay for the existing business as well.

On average, a salvage yard is about 30 acres and costs around half a million for the building and two to three million for the land development, which includes leveling it out, adding rocks, and installing a fence?

That's correct.

Okay.

We might spend as much as $50 million to open a facility. However, on average, if the land is already level and doesn't require a lot of preparation, the costs are lower. I spoke with our VP of Construction yesterday for some feedback. He mentioned that development and acquisition costs in major cities can be five to ten times more than in more remote or rural locations.

The choice of location often depends on the proximity to our nearest facility. Copart's goal has been to reduce towing distances. For instance, if we have one facility in North Alabama and another in South Alabama, we would have long towing distances from the middle of the state. However, if we open a facility in Birmingham, in the center of the state, it would cut our towing times and distances in half. This factor also comes into play when considering multiple yards.

How long would it take to obtain permits and comply with zoning laws if you don't have them yet?

In small towns that are eager for us to set up, it might take 60 to 90 days. However, in places like California, New York, New Jersey, and Florida, it could take up to a year.

Are there any significant costs associated with obtaining permits and dealing with the paperwork before you start developing the land?

Apart from legal preparation and man-hours, there aren't any significant hard costs involved. It mainly involves labor and meetings with the city development officer to explain our plans. Some people have misconceptions, thinking we're just going to stack junk cars. However, we aim to maintain a clean site with a white fence, a nice building, and paved areas. Once they understand that we're not a junkyard, the process becomes easier.

Who occupies the building? Why is there a need for a building on site?

In your building, you'll have various divisions. Let's start with the property. You'll have a storage area for vehicles. This is your main storage space. Then, there's a paved area where you line up the cars for sale. These cars are brought up from storage and arranged for sale, which might be weekly or at other intervals.

The building should have at least two large bay doors for the loaders to move in and out. Inside the building, you'll have employees. These include the general manager, assistant general manager, a yard manager who will be moving in and out, an office manager, and possibly a yard supervisor, depending on the size of the yard.

Let's assume the yard receives 100 cars a day, even though the company average is around 65. For every car you receive, you'll have one employee. These employees are divided into receivers, who take in the cars when they arrive and are placed in the receiving area.

You'll also have loader operators who move the cars around inside. There will be a few yard agents for general labor. Inside, you'll have title clerks. For a yard of this size, you might have about four title clerks who can process 30 to 40 titles a day.

You'll also have customer service representatives (CSRs) who manage the counter and perform other clerical tasks throughout the day. Depending on the volume of cars, you might need one or two dispatchers who coordinate the tow trucks to pick up the vehicles.

Is it typical for a 30-yard salvage location to receive 100 cars per day?

The average is about 65 cars per day.

Keep in mind that the more yards you build, the more you cannibalize other yards. This is done to meet service-level agreements with insurance companies. These companies have specific pick-up times based on distance. If your yards are spread out, it becomes more challenging to meet these times. But if your yards are close together, you cut the towing distance and can pick up the cars quicker.

For example, if we're doing 100 a day in Baton Rouge, Louisiana, and we open a facility in New Orleans, which is 60 to 70 miles away, the New Orleans location will start to cannibalize some of Baton Rouge's pickups. This is why the average is about 65 a day. During catastrophes like hurricanes, we might receive over a thousand cars a day. But on average, we receive about 65 cars a day.

What is the yard's capacity?

The number of cars per acre depends on the space. We estimate about 125 to 150 cars per acre. Copart tends to pack them tightly, which I'm not entirely in favor of, as it can lead to car damage. Hence, I've given you a range. My preference is for a slightly less dense arrangement.

It's over 100 cars per acre?

Yes, over 100 per acre, approximately 125 per acre for storage.

For storage, understood.

By storage, I mean cars that are awaiting sale or waiting for their titles.

Let's continue with this example. This facility receives 65 cars a day. It's a 30-acre facility. Could you go through the different employees required at each station for a yard of this capacity? Also, what would be the average pay for these employees?

For every eight cars, you need one employee. So, for 65 cars a day, you would need two receivers. These are the employees who take images of the cars, check them in, clean out the trash, and sometimes spray them off. They take about ten images of each car, including the dashboard to show if the airbags are deployed and the odometer reading.

You would also need three loader operators. Two of them would be responsible for moving the cars from the receiving area once they're checked in by the receivers. The third loader operator would be responsible for setting up the sale area by moving cars from storage and placing them in the sale area. One dispatcher should be able to handle 65 cars a day.

What does a dispatcher do?

A dispatcher coordinates the trucks, directing them where to go to pick up cars. For instance, they might send a truck to Joe's Body Shop or Smith Chevrolet.

And those are the employees who are in the yard all day. Have I missed anyone before we move on to the building staff?

You might have a yard agent, a laborer, who could be tasked with various duties such as removing trash or numbering the sale. It's important to note that receivers earn more than yard agents, so it's more cost-effective to have fewer receivers if a yard agent can fulfill the necessary tasks. However, if a yard agent is receiving cars, they should be compensated accordingly.

Moving on to the inside roles, we have the dispatcher. We also have title clerks, who should be able to handle 30 to 40 titles a day. Therefore, you would need two title clerks.

Then there are CSRs. The number of CSRs often depends on the facility location, but generally, you would have at least two. They handle customer interactions at the counter, process payments, and assist the title clerks. A significant part of their role is to help the dispatcher clear the cars. This involves contacting the shops to confirm if a car is ready for pickup and if all personal items have been removed by the owner. They also need to ascertain the charges, after which the system generates a check, and the driver is sent to pick up the car.

To summarize, we have two receivers, three load operators, one dispatcher, one yard agent, two title clerks, and two CSRs.

Yes, and you would also need an office manager. The office manager oversees the inside operations. At Copart, we sometimes had an office supervisor, who was paid a bit less, but essentially did the same job. This largely depended on the size of the yard.

In addition to the office manager, you would have a yard manager who is responsible for everything outside, ensuring operations run smoothly. Finally, there's a general manager.

What's the difference between the yard manager and the general manager?

The general manager oversees the entire facility, both inside and outside. The yard manager, like the office manager, supervises the employees in their respective areas. The yard manager oversees the outside employees, and the office manager oversees the inside employees. The general manager is in charge of everyone.

I can provide the hourly rate. This is based on a Louisiana facility, which is average. Right before I left the company, they implemented a significant wage increase due to the competitive nature of the industry post-Covid. As of yesterday, the receivers outside and the customer service representatives inside earn $18.50 per hour. The loader operators, title clerks, and dispatchers earn $21 per hour. The yard manager and office manager earn between $40,000 to $55,000 per year, depending on their tenure. However, a salary of $45,000 per year may not be sufficient in California. The general manager typically starts at $65,000 to $75,000 per year.

What about the yard agent?

Currently, they earn up to $15 per hour.

So, this is for a typical 30-acre facility that processes 65 cars per day?

Correct.

How is the space divided? How much of the 30 acres does the building occupy? If you were to zone the salvage yard, how would you allocate space for the building and the parked cars?

Let's assume a 2,500 square foot building, perhaps 3,500 square feet with the bays for the shop, loader storage, and supply storage. I should also mention that yard agents are responsible for wrapping cars. If the windows are broken, they cover them with plastic wrap and tape to prevent rain damage. This is a significant part of their role.

As for the land, there's a paved parking lot at the front for buyers. The paved area is typically large enough to hold the average number of sale cars plus a little extra. If you sell 150 cars every two weeks, you need sufficient sale area. Let's say four to five acres. By the time you account for the surrounding area, you're looking at roughly three acres of paved area for an average yard, possibly a little less for a smaller one.

It's preferable to have the cars on pavement for sale to prevent buyers from wandering into the storage area. This also protects the cars in storage. The remaining land is used for storage. The way you arrange the cars, whether in four, six, or eight packs, can significantly impact space utilization.

How you decide whether to stack the cars in packs of four or six?

Suppose I have a yard with 20 acres of storage. Often, sellers want their own designated area so their adjusters know where all their cars are for inspections. I wasn't initially keen on this approach as it seemed inefficient for the loaders.

If I have 20 acres, I would likely stack my cars in four packs at one end of the yard to minimize travel and fuel consumption, gradually expanding into the rest of the yard. This is a consolidation strategy.

When I first opened a yard, we used a two-pack system, but we were much smaller then. By the time I left, we were using eight packs, which I disliked. The car you need is often stacked four deep, requiring you to move other cars to access it.

The yard is organized into lanes for the loader operator and rows for the cars. If the loader operator needs to access lot number 12345 for sale, but it's behind lot number 678910, he has to move the other cars aside, retrieve the required one, and then replace the moved cars.

While stacking deeper allows you to fit more cars into less acreage, it's more difficult. I would only recommend stacking deep when you're running out of room. When we say four-pack or eight-pack, we mean there are four cars in one lane backed up to four cars in another lane, making eight cars in total.

We've discussed employees, but what about the machinery? What would typically be on a 30-acre yard?

For a yard of that size, you would need three loaders and several tow trucks.

Let's start with the loaders. We typically use ones with a 21,000-pound lifting capacity. These aren't the forklifts you see in shops; they're more like front-end loaders with 15-foot forks on the front.

When I started, we had Fiats, which we jokingly referred to as 'Fix It Again, Tony'. They were simple and functional. However, we've now transitioned to Caterpillar equipment, which comes with full cabs and air conditioning. This is particularly useful in the south, where temperatures can reach 105 degrees. However, some of the loaders in the north do not have air conditioning. These loaders cost around $120,000 each, which was a great deal due to Copart's bulk purchasing. We would typically run them for 15,000 hours before selling them.

These are the loaders, correct?

Yes, and another task for the loader operator is to load transport trailers that come in. For instance, if a transport that holds nine cars comes in, the operator will need to load them. This is a periodic task, although in some yards like Houston, it's a full-time job.

You'd have about three loaders. And you mentioned something about forklifts?

Some people refer to them as forklifts, but I call them loaders. They're essentially the same.

Ok, got it

Yes, it's like a front-end loader without the bucket, and you attach the forks to it. One thing I've learned from my experience is that these big loaders come with standard brakes, drums, and shoes. However, if you don't opt for the heavier specification wet brakes, you could end up spending $40,000 to $50,000 in repairs. This is because the standard brakes on these loaders wear out due to the constant stop-and-go movement while carrying heavy equipment in the yard.

Apart from these three loaders, what other machinery would be there?

You're also going to need tow trucks. You can either purchase your own and maintain a fleet, or subcontract it out to privately owned tow companies that will pick up and deliver the vehicles.

How many tow trucks would you typically have?

Considering a yard, Copart had around 800 in their entire fleet and they were still expanding. However, that only represented about 25% of the total cars picked up. So, if you had to pick up an average of 65 cars a day, your average tow zone, and by that, I mean the average distance you would have to travel to pick up a car, is about 35 miles. Let's just stick with that. I could discuss tow zones, but it's quite complex.

If you consider a four-car hauler versus a two-car hauler, if the former can make two runs a day, he's going to get eight cars a day. Obviously, a two-car hauler, which would stay closer to the yard and would have shorter tows, would be running the city, should be able to pick up ten or twelve a day. So, depending on the location, like for example, if you had a rural location and it was a distance into the city, you may want three, four cars and two, two cars because you're going to be going further out. And if you send your guys further out in trucks, you want them coming back with more cars.

Now, you can also subcontract that out. We did that. I never liked it because when that happened, I lost my leverage. There were some rumblings of possible unions in places like Detroit and near Washington, DC. So the owner of the company decided to sell all the trucks. That put us at the mercy of the independent haulers, which we managed to make work. But an employee with a truck is a lot easier to direct than an independent businessman with a truck that says, "No, I'm not running today," when you really need them. That was the reason I liked having our own trucks.

Who would drive your trucks?

Our employees.

It's on top of those you mentioned earlier.

Correct. In the US, to drive a two-car tow truck, you just need a class D license, which anybody can get. But when you go to a four-car, which is more weight and longer length, you have to hire CDL drivers. This requires a higher rating and a more rigorous test, and you usually have to pay them a bit more. But I think paying them by the pickup is better. Their pay was often based on the number of cars that could get picked up. Keep in mind, Copart is paying for the gas, the truck, and the upkeep on the truck. All the drivers have to do is drive it and bring the cars in.

Does every yard have their own tow trucks or do some yards have their own and others contract independent contractors with their own trucks?

They've come full cycle with that. They had their own, then they went to totally independent haulers, and now they've gotten back to buying trucks and they're up to about 800, I think, last time I talked to them.

Is every tow truck assigned to one yard or do they rotate?

So, I'm going to have two two-car tow trucks in my yard, truck number 123 and truck number 456. These trucks will only pick up cars and bring them back to this yard.

Any other trucks in my yard operate the same way. They are all assigned to a specific yard and do not run between yards.

What would be the cost of the forklifts and tow trucks?

Forklifts cost around $125,000. If you add heavier brakes, the price can increase by about $20,000. However, Copart pays around $115,000. I've found that it's often more cost-effective to buy used equipment, although Copart doesn't usually do that. We've sold our well-maintained used equipment for good prices.

Moving on to the cost of tow trucks. A two-car tow truck, which has a movable bed with a winch, costs about $140,000. A four-car tow truck, which can carry one car over the cab, two on the bed, and one in tow, costs about $275,000.

You mentioned that you run the forklifts for 15,000 hours and then sell them. What about the tow trucks?

We usually sell the tow trucks after they've clocked 250,000 to 300,000 miles. The Cummins diesel engines in our trucks can easily go over half a million miles. However, Copart's policy is to sell the trucks while they're still in good condition to get a decent price. The buyer might even continue to tow for us. Typically, the trucks reach this mileage in about four years.

This is for the tow trucks?

Yes, that's correct. On average, the national cost to tow a car is about $88. This can vary from $50 per car in Florida to $135 per car in Boston.

So, it's the cost to pick up a car and bring it to the yard?

Yes, that's correct. This cost includes the employee's wages, the cost of the truck, and fuel. On average, it amounts to $88 per car.

And where would you pick up the cars from?

We typically acquire cars from tow yards. By tow yard, I mean a place where a tow truck has taken a car after an accident. For instance, it could be Jim's Towing Service. We may also pick up cars from body shops if it's determined that the car cannot be repaired and is totaled. Sometimes, we pick up from city impounds, especially if a car was stolen and recovered. Occasionally, we also pick up cars from residences, particularly if the car is older but still totaled and drivable.

So, after an accident, the car is towed to a certain location. The insurance company then sends an expert to determine if the car is totaled. If it is, they call you, and you send a tow truck to bring it to your yard. This last leg of the journey costs an average of $88 per car, including the truck, driver, and fuel expenses.

That's correct.

Could you tell me the average distance a car would travel with Copart from the initial location to the yard?

On average, the pickup from a shop, body shop, or tow shop is about 35 miles. Of course, it varies. We've had some pickups as close as three miles away, but on average, it's about 35 miles. This includes pickups from rural areas as well.

Apart from forklifts and tow trucks, are there any other types of heavy machinery on the ground?

No, not unless there's something unusual. I can't think of any scenario where we would need anything else.

Do you charge the insurance company for the transportation from the repair shop to the yard, or is that cost absorbed by you?

We would go to the shop and pay any money owed for the initial tow from the accident scene and storage while the car was at their facility. We pay that upfront and then deduct it from the sales price when the car is sold. As for towing the car in, some contracts do not charge a towing fee. We might split it as a percentage, say we take 20% of the sale price and leave them with 80%. The 20%, depending on how we calculate it, is enough for us to make money and cover the cost. But if it's strictly a tow fee, we would charge about $150 for that tow in.

On average, how much would you advance the insurer for storage and initial transportation to the repair shop?

The average advance cost typically runs between $250 to $300 per car. This is because tow fees from the accident scene are often regulated by cities.

Let's say the tow fee was $100, and the car stayed there for ten days before the insurance representative inspected it. That's $40 per day, adding up to $400. So, the total would be $500. However, insurance companies often declare these vehicles as total losses over the phone. They'll send a picture and instruct to tow it to Copart. This is because repair shops charge for storage, while Copart does not. Therefore, they prefer to move the car out of the shop to avoid storage charges.

Once the car arrives at the yard, what happens next?

The truck driver would unload the car in the receiving area, move his truck out of the way, and bring his paperwork to the dispatcher. He would report the two cars he brought in, and the dispatcher would assign him two more to pick up. The receiver then walks around the car, removing any trash that might interfere with the pictures. Some customers request their cars to be cleaned, like vacuuming and wiping down the interiors. We don't wash the cars, but we do clean them based on the customer's request.

However, I personally don't believe that adds much value. Removing trash and cleaning the interiors is more beneficial. Some cars can be quite messy, as if people live in them. After cleaning, the receiver takes ten digital images and uploads them using an iPad. Once this process is completed, the receiver's job is done. The loader operator then sees that the car is ready and moves it to the storage area, where it stays until it's sold.

The receiver takes pictures, possibly cleans the car, and then what happens?

In less busy yards, the protection service, like plastic wrapping over broken windows, is done at this stage. If not, it's done once the car reaches storage. One important task is to check if the car can start and drive. Copart's definition of 'drive' is quite loose. It means the car can go into gear and move forward 10 feet. It doesn't mean it's drivable for long distances. If a car can 'drive', it increases the return on the sale by about 30%. This indicates that the engine and transmission are likely in working condition.

Once the receiver completes these tasks, what's the next step?

Once the initial assessment is done, the car is marked and details are entered into an iPad. This includes whether it started or drove, the odometer reading, and pictures of the vehicle. For instance, if the car has 87,000 miles on it, we take pictures of it, focusing on areas with heavy damage.

The receiver is required to take eight standard pictures, with an additional two to three for highlighting any extra damage or specific points of interest, such as torn back seats. For flood-damaged cars, we mark the water line on the exterior with a paint stick to indicate the depth of water the car was in.

If the engine was burned, an extra picture would be taken. The receiver has the discretion to decide on two or three additional pictures as needed.

The receiver takes the pictures, cleans the car, and attempts to drive it. What happens next?

Once the receiver is finished, the loader operator takes the car to storage.

On average, how long does a car stay in the yard before it is sold?

On average, the goal is 60 days, as per the insurance companies. This is assuming everything goes smoothly, like if the car was totaled and the insurance company and the insured have reached a settlement agreement.

For example, if the insurance company agrees to pay the insured $10,000 for their wrecked car and the insured provides the title to the insurance company, the process begins. If the car has a lien from a bank, part of the settlement money goes to the bank to pay off the lien.

The lien holder then sends the title to the insurance company, which forwards it to Copart. We verify everything, then send it to the state for processing into a salvage title. This process varies by state. In Mississippi, it takes about four weeks, while in some states, it only takes two to three days.

The key is to ensure we convert the titles to salvage, flood, hail, or whatever the case may be. This is to ensure the title is branded correctly. We don't want to give a clean title to a buyer unless the car is being sold as such. Some dealer cars are sold on clean titles, but for the most part, they're branded titles.

After the car is stored and auctioned, and someone wins the auction, how does the transportation process work?

The vehicle is sold at auction on a Monday. The buyer then has two days to make the payment, which would be by Wednesday. There are several payment methods available. If the buyer has been approved by the company to write company checks, they can use that method. Otherwise, they must bring a cashier's check or make an ACH or wire transfer to Copart.

I managed some yards near the Mexican border, specifically in McAllen, Texas. I had to hire three additional staff members to handle payments because many Mexicans would cross the border to pay at the nearest yard. They could pay for their car in McAllen, even if the car was in North Carolina. Payments can be made at any yard.

Who is responsible for the transportation of the vehicle to the buyer?

Yes, we do offer delivery services. If the buyer is within the area where we usually pick up - about an average of 35 miles - we can deliver the vehicle for a fee. If the buyer is outside of this area, they usually arrange their own transportation. We do provide some links to long haulers for this purpose. However, most buyers handle their own transportation.

For instance, if a buyer has purchased cars in Alabama, Kentucky, Louisiana, and Florida, they may send their own driver with a nine-car hauler to pick up the vehicles.

If you were to deliver the vehicle within this 35-mile radius, how much would you charge on average?

The last time I checked, the average delivery fee within 50 miles was about $198.

What would be the cost for you, including the truck, employee, fuel, and driver?

On average, considering the distance, it would be around $100. This is for a 50-mile radius as opposed to the 35-mile radius I mentioned earlier. So, a fair estimate would be that we double the cost.

You double the cost for the way in and the way out, correct?

Yes, that's correct.

I'd like to delve more into the auction process. Now that I understand how a yard operates, I'd like to dedicate an entire interview to understanding the auction part.

Are you referring to the actual physical auction? As far as Copart is concerned, the auction is entirely online. Have you visited their website?

Yes, exactly. I'm interested in how it happens, who bids for it, the different fees, and so on. I'd like to explore these aspects in detail and I don't want to rush through them in the last five minutes of this interview.

Let me tell you about the types of buyers. We have dealers, individuals, and others. It's about 40% dealerships, 50% dismantlers, and the remaining 10% is split between individuals and others. The largest group is dismantlers, and approximately 35% of all cars are shipped out of the country.

How long would it take for a yard to go from the planning phase through development up until full capacity, or commercial operation?

By full capacity, do you mean when we start picking up cars and operating?

I mean the point at which the operations are mature.

From the commencement of construction to opening day, it typically takes around a year, depending on various factors such as the construction process. I mentioned the issue of rock again because it's a significant factor. For instance, in New Orleans, we didn't have enough rock in one area of the yard, which led to a burst through the crust and water seeping in. So, approximately a year from the start of construction to opening is a reasonable estimate.

After that, if you're operating a new facility, you're likely to be around 60 days out before you have your first sale because you'll need to start obtaining titles and processing them. So, in total, we're looking at around 15 months.

If we consider the entire process from planning and development to full commercial operation, what would be the most challenging part to replicate if someone wanted to do it the same way Copart does?

Copart developed all of its IT work in-house. We never purchased software; we built everything. The degree of sophistication required has evolved over time. Initially, everything was done on paper, except for the call for release and the payment system, which were online.

We used green screens up until about ten years ago. The receiving process was done on paper and with discs and cameras, where we would upload the disc. Now, it's done via iPad with a Wi-Fi system at the yard, which is why the receiving area needs to be fairly close to the building. I can tell you about the systems we used, but I can't tell you how difficult it would be to replicate them.

What KPIs would you look at to determine how a yard's operations are performing?

We would examine the time to first call when an assignment comes in.

Let's take the scenario where State Farm instructs us to pick up a car from Jim's Body Shop at 1:00 in the afternoon. How long before we contact that body shop? We want it as quick as possible. My feeling was always 30 minutes or less, which sounds a bit long but there are a lot of things going on.

The next thing we monitor is the time it takes to clear the pickup. This involves the number of calls we had to make before the body shop was ready to release the car. Once the pickup is cleared, we then look at how long it took us to actually pick the car up. Our goal is to do this within a day.

We also look at how long it took from the time the driver confirmed the pickup to when we finished receiving the car. The aim is to complete this process within 20 minutes. However, we don't efficiently track the time from this point to when the car is moved to storage, as the loader operator is constantly moving cars.

We then shift our focus internally and look at how long it took for the insurance company to send us the title. This could range from two days to 60 days. While this is a key performance indicator, it's not entirely within Copart or the auction's control.

Once we receive the title, we look at the time it took to process it. Our goal is to process it within a day of receipt. We then look at how long it took for us to get the title back from the state.

After receiving the title back from the state, our goal is to put the car in the next sale. We then track how long it took the buyer to pay and how long it took us to pay the insurance company.

However, tracking the payment to the insurance company became less significant when we moved the payment process to the corporate office. The corporate office can pay with one check or transfer, making the process more efficient. And that's pretty much the process.