In the auto salvage business, bad weather is great news for profits

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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."

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