Can anything good come from bad weather? Yes, if you're in the vehicle salvage business.
Insurance Auto Auctions is the auto salvage subsidiary of KAR Auction Services and a corporate sibling of auction company ADESA. IAA's auctions, where vehicles that have been totaled are sold for scrap or parts, will get a business boost this quarter from selling some of the wrecks that didn't survive the tough winter.
"There were a lot of cars off to the side of the road getting picked up by tow trucks. We will benefit from that activity without a doubt," KAR CFO Eric Loughmiller told analysts during KAR Auction's fourth-quarter earnings call last week.
He declined to quantify the bump from cars that got bumped, but said: "It's been a very difficult winter, which makes for a strong supply of total-loss vehicles."