Planet Money - The salvage car Silk Road

Episode Date: September 8, 2022

A practically brand new Lexus with a New Jersey inspection sticker lands on an auto body lot in Turkmenistan. How did it get there? To find out, we journey into the bizarro economy for misfit cars. And we follow a very different kind of journey – of the auto body repairman from Turkmenistan who brought us this story in the first place. | Subscribe to our weekly newsletter here.Subscribe to Planet Money+ in Apple Podcasts or at plus.npr.org/planetmoneyLearn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

This is Planet Money, from NPR. Scott Gurian, you are the host of the Far From Home podcast, and a while back you came to the Planet Money team with a kind of far-flung automotive mystery on your hands. That's right, Alexi. This whole thing starts six years ago when I met this guy named Araz. I was on a road trip across Asia when my car broke down in Turkmenistan in the middle of the desert. Weird flex, but okay. I managed to get towed to a garage, but nobody really spoke English except for Araz, who worked at an auto body shop next door. I was

the first native English speaker he'd ever met, so he was pretty excited. And he really went out of his way to help me. He took me to a money changer, helped me get back on the road. Ever since then, we've kind of stayed in touch. And a few months ago, he sent me this video. This is my place, my garage and my home. And these are cars that I repair and paint. Aras is giving me a tour of his repair lot. It's out in the desert, bright and dusty. There are a bunch of cars parked haphazardly. And then he gets to the reason he's sending me this video.

It's his one used car that's just arrived. Yesterday, this car came and it came from New Jersey. He can see that on the inspection sticker and he knows New Jersey is where I'm from. It's funny, isn't it? Maybe you know the previous owner of this car. Yeah, like everyone in New Jersey knows each other, right? Yeah, Roz was kind of joking,

but he was genuinely curious about this car and what I would make of it. It was a white Lexus SUV, very new looking. And when we got Araz on the phone, he explained that he gets cars from the U.S. into his shop all the time. But they're usually not like this one. You wouldn't believe, but every second or third car here is from America. And all of them are damaged cars. Usually he gets the castoffs, cars that arrive crumpled and dented. Raz fixes them up and gets them back on the road for his customers.

And so when he got this car, this fancy 2021 white Lexus with only 7,000 miles on it, he wanted to know the story. How did it end up in his lot? Who did it belong to? And why did they get rid of this almost new car? For Araz, that was the mystery. I thought, why do people throw away that kind of car to the countries like Turkmenistan? I thought New Jerseyans are rich people just throwing that car away and bought a new car every year. As long as I've known Aras, he's been super curious about life in the United States. And I sort of fell in love with the idea that maybe this Lexus could become, you know, not just a car, but a vehicle.

Maybe we could travel through the winding web of the global economy and connect DeRoz to whoever used to own it on the other side of the world. And when we heard that the car had come in on this international clunker underground, that struck us as a mystery tailor-made for planet money. Like, was this Lexus part of some Soprano-style New Jersey stolen car ring? Would we uncover an elaborate insurance fraud racket? What are the economic forces pushing this steady flow of damaged and mangled cars halfway around the world in the first place? Hello and welcome to Planet Money. I'm Scott Gurian. And I'm Alexi Horowitz-Ghazi. Today on the show, we enter a strange, bizarro economy for misfit cars to offer our friend Aras some Silk Road side assistance. We'll consider the financial gains of total loss, uncovering how one country's trash becomes another's automotive treasure.

And we'll trace the journey of our mysterious luxury SUV all the way back to a two-story house in suburban New Jersey. Before we set out on our mission to uncover the economic forces that sent this fancy Lexus SUV from New Jersey all the way to Turkmenistan, a little about my friend Araz. Araz is in his mid-30s, lives in a city in Turkmenistan's Karakum Desert. He's never left the country, but he's always dreamed of living in the U.S. He actually taught himself English by watching pretty obscure American TV shows. It's an old TV show called Friends. Maybe you know that. Yeah, I've heard of it. If you were one of the characters on Friends,

which one do you think you'd be? I see myself as a Chandler. I know that I'm not a funny guy, but he can do business. That's for sure. Okay, I don't understand any of these references, if I'm being honest. Don't be such a Rachel. But business is a big part of Aras's life. He works 10 hours a day fixing up this constant flow of damaged American cars that land in his shop. They appear without any information about how they got there or who they belonged to. And so Araz sometimes imagines where they might have come from, kind of longing to know more. Sometimes he'll even find little clues, these artifacts from their previous lives.

Toys and newspapers and magazines. One time he found a photograph of a smiling family sitting in their minivan, three kids and their mother. It was a little dark in the evening, but the photograph was pretty clear to recognize the people, and they look happy. Araz has three daughters of his own, so the photo made him kind of daydream about what life might be like in America.

What it might be like to be part of that world. And so when we agreed to look into this surprisingly pristine Lexus, it was a chance for Eraz to learn more about one of these mystery cars. Maybe even to talk to whoever used to own it. Maybe the car could be like a portal, connecting Aras to people on the other side of the world who he'd otherwise never meet. Aras told us the Lexus from New Jersey was on its way to a client of his, a successful businessman he's known for a while now

named Magtim. I would describe him like a Ross in France. He's kind of a Ross. Yes, he's kind of a Ross. He's a reliable person too, you know, not like the other. Joey can deceive you easily. Yeah. When Ross promise something, you know that he will do.

He's a very reliable man. So that's where we started our investigation, with reliable Magdum. He was the first link in the chain of this car's journey. We got him on the phone with Eraz translating. So I guess to start off, Eraz, can you ask him to tell us his full name and what he does for work there in Turkmenistan? His name is Mautum, and he's a businessman. And with Mautum's help, we started piecing together how this flow of cars from the U.S. works. To begin unraveling it, you need to know a little bit about Turkmenistan. It's a former Soviet republic nestled above Afghanistan and Iran.

It doesn't have a domestic auto industry. And most Turkmen, and women, are not rich. But they do still need cars to get around. So one way they can afford them is by bringing in damaged cars. Even wealthier people like Magdum get their cars this way. The white SUV from New Jersey is Magdum's first Lexus, but he has lots of cars. Can he tell us about all of the other cars he owns? All of his cars were imported through Dubai's port. He has a Highlander, and then he has a big truck. It's from Dubai.

All of his cars were imported through Dubai's port. But Magdim says he actually buys the cars through these international car auction websites that are a bit like eBay, but for the global used car market. He told us he'd spent weeks searching for this particular kind of Lexus, a Lexus RX 350, which is kind of a status symbol in Turkmenistan. He specifically wanted to buy Lexus in a white color. White is important. Magdum didn't want a white car because he's picky. He needed a white one because that's one of the things about owning a car in Turkmenistan. The country has a history of authoritarian leaders with very particular tastes. So there's a long list of rules about what cars can look like.

For example, sports cars are illegal, vehicles can't be imported if they're more than five years old, and they have to be white. Though Aras says you might be able to get away with silver. By the way, Turkmenistan's repressive government, that is why we're not using Araz and Magdim's last names. So anyway, in addition to wanting a Lexus and needing to satisfy all of the local rules, Magdim wanted to find a car that didn't have a lot of cosmetic damage, which is not easy. Araz says most of the time when you're sorting through these auction websites,

all you're seeing is mangled car after mangled car. Usually cars in a bad situation, in a bad condition. But Magdim says if you search hard enough, you could occasionally find something in much better shape for a fraction of what it would cost brand new in Turkmenistan. And one day last fall, after scrolling the auction listings for weeks on end, Mugden finally found what seemed like a diamond in the vehicular rough. A 2021 white Lexus RX in seemingly beautiful condition. There were some electrical issues and rust, but nothing a trusty Turkman mechanic couldn't fix. If he doesn't mind saying, can you ask him how much he paid for this car? The auction opened at $12,800.

And there were a lot of people bidding. When he played, his final bid was $20,600. $20,600. After he won the auction, Magdum paid a couple thousand more to get the car on a container ship from the U.S. to Dubai and then trucked from there to Turkmenistan. And on top of that, the car needed repairs. The total price came to about $30,000, which is a lot, but only half of what he would have to pay to buy one brand new. So that is Magdum's side of the story.

But what is going on on the other side of this market? Why did this fancy car end up listed at an international auction to begin with? To figure all that out, we needed to continue following the car's journey backwards. And thankfully, Magtim gave us one important clue. The name and location of the car lot that sold his Lexus. He found it on the auction called Copart at Chamsburg. I think it's Pennsylvania. Is there an online auction, Copart, in Pennsylvania?

There is indeed a company called Copart that runs auto auctions in Chambersburg, Pennsylvania, though that is one of just hundreds they run around the world. We called up Copart, hoping they would crack the case wide open for us, tell us how our Lexus ended up at auction. But... To my knowledge, we wouldn't release that information. Or maybe they could help explain how this whole international used car market works?

Uh, yeah, I mean, look, I can't give you too many specifics. Okay, fine. Plan B, we track down someone who used to work at Copart. His name is Steve Lang, and he spent more than 20 years working in the car auction world. Started out as what the industry calls a ringman. And what a ringman does at an auto auction is he looks at bidders from all over God's green earth, and if they bid, he goes, yep, yep. And I made a living out of doing yep, yep. In fact, I was probably one of the most talented

yuppers you have ever met. Basically, he was the middleman communicating bids from buyers back to the auctioneer. Kind of putting the car back into Carnival Barker. We laid out our story to him. Arise, the Lexus. So what if you're trying to figure out how a Lexus RX 350 made its way to Turkmenistan? Oh, that's pretty simple. Simple enough, anyway, for a seasoned ringman like Steve. The first thing to know, he explains, is that

Copart specializes in totaled cars, which is a huge piece of information. That means this seemingly pristine Lexus was actually a totaled vehicle by the time Mogtim sought for sale online. Steve explains that this distinction between normal secondhand cars and totaled cars is the big red line in the used car world. These vehicles have gone into a fight and they lost. That's why they ended up at a salvage auction. Totaled cars have been through something so catastrophic that they're not legally allowed on the road anymore. And before we talk to Steve, I think I assumed that a totaled car was a complete write-off. Like, totaled stood for totally worthless. But Steve

says that is not how it works. So say something really bad has happened to your Lexus. Your insurance company will send an agent to figure out how much it'll cost to repair. If they say it'll be more than 75 to 80 percent of the car's blue book value, then they'll declare it a total loss. They will tell you, you know what? Look at this thing. I mean, it's almost a pretzel. You can't play around with this one. Guess what, mister? Your car is no longer a car, at least not for you. The insurance company cuts you a check for a new car, and now they have to figure out what to do with your wrecked Lexus, how to squeeze as much value out of it as possible, which is where these special auctions come into play. Steve says about two million cars pass through them every year. The buyers of these cars can be professional body shops, or they can be auto recyclers and junkyards, or they could be exporters. They can

be people who send these vehicles abroad. And often that's how you get the most for a totaled car, by selling it abroad. Most people want to realize that their car may be worth a lot more on an international market than it would be just here in the United States. Now, there are two big reasons why a totaled car might get higher bids from buyers in places like Turkmenistan than here in the U.S. First of all, when a car is declared a total loss, it gets a new kind of title, a salvage title. It's kind of like a scarlet letter.

That information stays on the car's permanent record in the U.S. no matter how much work you do to fix it back up. So the car's domestic resale value will never recover. But if the car leaves the country, those records and regulations don't always follow. It depends on the laws of whatever country it's going to. The other reason the international market can be so much more lucrative has to do with the costs of getting a damaged car back on the road. Labor and parts can be a lot less expensive depending on where the winning bidder is. It could end up in Iran. It could end up pretty much anywhere. It could end up in Somalia.

It could end up in Libya. What about Turkmenistan? That is a hotbed, let me tell you. And keep in mind that labor costs in many of these countries is a small fraction of what it is here in the United States. You go to a Tudor dealership, they may charge you $140 an hour. In these countries, people may just make $2 to $3 a day. just make two to three dollars a day. So stepping back, here's what we're piecing together about our Lexus from Oraz and Magtim and Steve the auction guy. We know the car originally came from New Jersey, where something happened that gave it that scarlet letter salvage title. And so it entered

this global supply chain of damaged American cars that flows from accident scenes to auction lots to container ships, eventually landing in Araz's repair lot. But how did this practically pristine car get declared a total loss? We still didn't really know that part. And there was still that dream I had of finding the original owner. I still wanted to connect to Roz back to this person in the U.S. I wanted to satisfy some bit of his curiosity about the cars he repairs and his wish to see the world on the other side. Like if we wanted to track down

the original owner of this vehicle, what steps would you take? What state did it come from? New Jersey. Oy vey. Why do you say that? New Jersey is the worst state to get any information about anything. As a New Jersey resident who's dealt with the DMV, I can attest.

Yeah, I grew up in New Jersey. I know what you're talking about. It's terrible. With that hopeful assessment of the path before us, it was time to dive headfirst into the bureaucratic thicket of the Garden State to find the source of this American Lexus. Stay with us. Hey, it's Nick Fountain. Thank you. to bring to that process. You can hear that with me and Amanda Aronchik if you subscribe to Planet Money Plus. Links on where you can do that in our episode notes.

All right. So as we all know, there are three parts to any story worth listening to. The beginning, the middle, and the end. So far, strangely, we have figured out the end and the middle of this car's journey, but not the beginning. That's right. The question of how this Lexus got declared a total loss is still up in the air, as is the identity of its original owner. And Scott, this is where your gumshoe detective skills kicked in. Yeah, I'll admit, this is when I got totally obsessed trying to find answers. I was worried about you. Luckily, Aras gave me another clue. The vehicle identification number. Real ones call it the VIN.

When I looked up the VIN, I found the original online auction listing for the Lexus with lots of photos and other details of the car. It showed Geico had insured the vehicle, but when I called, they wouldn't tell me anything. There was this other big clue, however. In one of the photos, I could see some writing scrawled on the back windshield. Montgomery Police Department flood impound. Mystery Lexus bingo. A flood. This is why the car looked like it was in great shape, but was still damaged enough to get declared a total loss. Yeah, and the car also had a date written on it. September 2nd, 2021. Which, when I saw that,

I was like, oh, okay. Because I remember being in New Jersey last September. That was exactly when the tail end of Hurricane Ida passed over the state, causing massive destruction. Huge amounts of rain, and there were even tornadoes in some places. We looked it up on Carfax, and apparently the storm damaged more than 200,000 vehicles. And now we knew the particular police department that had processed our car, Montgomery Township. Montgomery Police. Hi, I'm actually calling because I'm trying to see if I could find some information on a particular

vehicle that was flooded last September. Who would be the best person for me to speak to about that? Probably somebody in record. Hold on one second, I'll transfer you. I did eventually reach a police sergeant. He didn't want me to record our call, but he told me he was actually working the night of the storm last year. A bunch of cars got flooded, including his own pickup truck sitting right out in the police station parking lot while he was at work. So he kind of had a natural interest in helping us. And at this point, we were so close. The officer checks the police database and is able to find the original owners almost immediately. He's got their name and address right there in front of him.

Then, of course, he tells us that he can't share it for privacy reasons. But he says he will go to the owner's house and leave a note for them telling them to contact us. So he does that. But as more and more time passed, it started to feel like things had kind of stalled. I was spinning my wheels, not getting any closer to connecting Aras with the original owner. I was sort of grasping at straws, trying to figure out how to make it happen. I even reached out to this private eye I know, a guy named Hal Humphreys. Perfect name for a PI. Right. I asked him if he could try to find these

people. I was hoping I could just kind of noodle around and find it and say, yeah, I've got it, but I can't give you the information. So even hard-boiled Hal Humphreys PI struck out. After exhausting every other option I could think of, I posted in the town's Facebook group, and late one night, I got a message from a guy named John Faranak. He's a tow truck driver, and he was working when Hurricane Ida came through. During the actual storm, it was kind of crazy with the way the rain was coming down. It was flooding in areas that didn't normally flood. And then you were dealing with the downed trees and all the water around in the area was moving with force, like had a mission behind it. John thought he might know our Lexus. And sure enough, not long after our phone call,

he sent me this TikTok video. People found out their cars don't float in high water. It's pretty upbeat for a video of a natural disaster, but that is TikTok for you. It's basically just cell phone video panning over a bunch of towed cars. And then, all of a sudden, there it is. The white Lexus RX 350. Yeah, I was kind of freaking out. This is when I felt like I had cracked the case. Because there was our Lexus, just hours after it was flooded,

about to be sent into the upside-down world of salvaged cars. Anyway, John also wouldn't tell us the names of the car's former owners, but he offered to swing by their home after work to try to talk to them for us. And so all of a sudden, after a couple months obsessing over the mysterious origins of this car, there we were talking to this friendly tow truck driver on the phone as he actually approached the former owner's house. There is a car in the driveway and it is a white Lexus. Really? No way. Wow. You know, I was wondering if they would have gotten the same car to replace it given that their old one wasn't that old. I know I would. John says it's a pretty typical suburban neighborhood. Not super fancy, but nice. Two-story houses, two-car garages, a little cul-de-sac. We're walking up the driveway.

two car garages, a little cul-de-sac. We're walking up the driveway. Ringing the doorbell. Here we go. I believe you had a white Lexus that was in an Ida in the flood? Yes. So we happened to be the towing company that towed it. There's two reporters that are doing an article.

They happen to choose your car. So they wanted to try and reach out to you, and they haven't been able to get a hold of you or find your information, and we won't give out your information without your permission. So that's why I'm here. Scott, you and I were just sitting in John's pocket, listening through his phone, but unable to say anything. Kind of hopeful, kind of cringing.

I personally was holding my breath in suspense. If you'd be willing to talk to them or not. John, no! Don't say or not! Tell them we're on the phone! Don't give up, John! No, we're not interested. Okay. Thank you for stopping by. We're not interested.

Not a problem. Appreciate it. You have a good night. You too. Ugh. Man's just not a problem. Appreciate it. You have a good night. You too. Ah, man. That is so sad. We've come so far. We're so close. I know.

I was so sure it was going to work. We were right there. And then it was over in like two seconds. I was feeling all sorts of whiplash. I just needed somebody, anybody, to help me make sense of it. So I asked John the tow truck guy. I guess you've kind of come as close as anybody to the edge of this mystery. How does it feel, John? It's quite interesting. You're right there to complete the story and find

everything out. So it's just like, bummer. I want to know know the the whole story yeah though they seem pretty firm but you never know or we just continue on with the story and now you have a way to leave it with that this is how it all ended they don't want to find it and they got another lexus yeah that is true that is true not not the ending you want, but it is a way to end it. John was unfortunately right. This was not the ending we'd hoped for. When we first started working on this story, we were trying to figure out the economic forces that took a car from my home state of New Jersey all the way to a dusty car lot in Turkmenistan. But we also imagined the story might end with something more poetic. A conversation between Aras and the original owner

where we'd all feel linked by the global economy. And think about how these everyday objects we kind of take for granted lead lives of their own, connecting us in ways we never even see. But we do have another ending, and maybe a better one. It also has to do with Eraz, who started us off on this whole journey. You see, a while back, Eraz decided to act on his lifelong dream of moving to the United States. He entered a lottery he heard about run by the U.S. State Department.

If you win the lottery, you get the visa. You get to live in the United States and you get to get green cards for your family, for you, for your children. And so what happened? We won. Congratulations. When I find out that I won, I was ecstatic. He decided to come to, where else? New Jersey. I'm actually the only person Araz knows in the U.S., so he asked if I'd be his immigration sponsor. And a few weeks ago, when he and his wife and three daughters landed at

the airport in Newark, I was there to meet them. Aras, hello. Good to see you. Good to see you. Great to see you. So how does it feel being here? I can't even describe. I've seen all the movies on TV. I don't know what to say. I'm really happy. Now they're working on getting settled. Araz just found a new job at an auto body shop. In the longer term, Araz says he wants to get into the damaged car market,

this time on the other end of that salvage supply chain, sending cars back to places like Turkmenistan. If you want to hear the whole crazy story of my road trip when I broke down in Turkmenistan, check out the first season of my podcast, Far From Home. Today's episode was produced by James Sneed, with help from Sam Yellow Horse Kessler, and mastering by Gilly Moon. It was edited by Molly Messick. Jess Jang is Planet Money's acting executive producer. I'm Alexi Horowitz-Ghazi. And I'm Scott Gurian. This is NPR. Thanks for listening. And a special thanks to our funder, the Alfred P. Sloan Foundation, for helping to support this podcast.