In recent months, we’ve seen the U.S. dollar lose ground against key global currencies—a trend that’s emerged partly as a side effect of the tariffs recently imposed on many countries trading with the United States. A useful gauge for tracking the dollar’s performance is the U.S. Dollar Index (USDX), which measures the value of the dollar against a basket of major currencies, including the British Pound, Euro, Japanese Yen, Swedish Krona, Swiss Franc, and Canadian Dollar.
Since January 2025, the index has dropped roughly 10 points and, as of the first week of May, is hovering around 99.5. In simple terms, a weaker dollar helps boost U.S. exports but makes imports more expensive—especially when layered with new tariffs. For the collision industry, this dynamic can have a significant impact, particularly in the area of total loss salvage vehicles.
Large U.S. insurance salvage companies report that approximately 35% of salvage vehicles are sold to international buyers. In addition, many vehicles sold domestically were won by U.S. buyers only after outbidding foreign competitors. This means that to retain those vehicles within the U.S.—for use in parts harvesting or for rebuilding and resale—domestic buyers are often paying a premium. When you combine vehicles sold overseas with those kept in the U.S. through higher bids, foreign demand influences more than 70% of total loss vehicle sales in the country.
The bottom line? A weakening dollar raises the value of foreign currencies, which further incentivizes overseas buyers to purchase U.S. salvage vehicles. As more of these vehicles leave the country, the domestic supply for recycled parts tightens—driving up the cost of those parts and adding pressure to repair costs within the collision industry.
