When you’re looking to get a vehicle at an incredibly low cost, there’s one category that you should investigate: salvage cars. Many auto buyers, and indeed many people looking to build a business, have discovered the benefits of salvage cars. Ignored by many buyers, these kinds of vehicles present an incredible opportunity for someone with savvy and a bit of mechanical skill.
An Explanation of Salvage Cars and Where They Come From
In order to understand the benefits of salvage cars, one must understand what salvage cars are. In a nutshell, these are vehicles that have had their insurance policies paid out to the insured at 75% or greater of the vehicle’s value. (The percentage varies depending upon the state in which the vehicle was insured.) Because the policy has been paid out, the authority in the state in which the vehicle was registered issues a salvage title to the vehicle.
Now, the reason for a car’s insurance policy being paid out can vary. In many cases, this will be due to a vehicle sustaining a high degree of damage in a collision or some other calamity. In these instances, an insurer determines the cost to repair a vehicle is in excess of a vehicle’s worth. In other words, the vehicle has been ‘totaled’.
This is, however, not the only reason a vehicle may be issued a salvage title. For example, consider the case of a vehicle that has been stolen. After the car has been missing for some time, the insurer pays out the policy to the insured. If that vehicle is subsequently recovered, the insurer takes possession of the vehicle, which has been issued a salvage title. In this instance, the vehicle itself may not have sustained any damage at all.
Even in case where a vehicle has been damaged, though, things are not always cut and dry. For example, there may be certain instances in which an insurer pays out a policy as a matter of expedience rather than as a matter of mathematics. Even if this isn’t the case, the ‘cost of repairs’ as determined by an insurer may be much higher than what’s actually needed.
Given all of the uncertainty, as outlined above, one can see how salvage cars aren’t what they might appear at first blush. Provided one is able to source a salvage car that’s in reasonable condition, the potential for savings is quite extreme!
Where You Can Buy a Salvage Car
To buy a salvage car, you will absolutely want to look into online car auctions. Through these auctions, everyone – regardless of whether one is licensed as a dealer or not – can access to dealer auctions taking place across the country. Because of this, one is able to browse an extensive inventory and has a much better chance of finding that diamond in the rough upon which a profit can be turned!
What’s more is online dealer auctions afford you the chance to conduct thorough research. With any salvage car you find, you’ll have access to the car’s VIN. With this, you can take advantage of a third-party source to request a vehicle history report. Using that, you can gain insight into how a vehicle became ‘salvage’, and whether or not it will make a savvy investment.
Some Difficulties with Salvage Cars
Before getting involved with salvage cars, it’s important there are a few potential drawbacks to them. The most notable of these drawbacks has to do with securing insurance.
To be sure, securing liability coverage for a salvage car should be a relatively simple affair. One should typically encounter no difficulty in getting such coverage from their present insurer or another. However, things are a little different when it comes to comprehensive coverage.
For obvious reasons, many insurers are loath to provide comprehensive coverage to vehicles rebuilt from salvage. However, this does not mean there are no options. One needs only to work with an insurer that specializes in salvage cars to secure comprehensive coverage. Do note, though, that premiums for such policies are typically quite expensive.
Beyond insurance, one also needs to understand the nature of a salvage title. Once a vehicle has been designated as salvage, it will always carry that designation, even if it has been rebuilt into near mint condition. This will have some effect on the resale value of the vehicle.
In the end, though, the above drawbacks are far outweighed by the benefits. Due to the incredibly low prices at which these cars can be bought and rebuilt, the trouble with insurance and resale value really isn’t trouble at all.
How to Make Money with Salvage Cars
There are two primary ways in which one can make money on salvage vehicles. First, one can use salvage cars as a mine for spare parts. Second, one can essentially ‘flip’ salvage cars in order to turn a profit.
As you likely already know, automotive parts can be quite expensive, particularly for rare and luxury vehicles. When you purchase a salvage car for the purpose of obtaining spare parts, you’ll likely find that the cost of the car is far less than the cost of spare parts themselves.
When rebuilding cars from salvage, the most money to be made is with collectible and luxury automobiles. If you are going to go this route, be sure to remember what was mentioned about a salvage car always carrying its designation. It would be unlawful to resell the vehicle without disclosing the fact that it has been rebuilt from salvage.
Get Salvage Cars in an Online Dealer Auction Today
The above are just the two primary ways in which one can make money buying a salvage car. There are others! In order to find out what your options are, and to get your entrepreneurial juices flowing, you should take a look at what’s out there. Simply create and account and start browsing the volume of salvage cars available through Auto Auction Mall. You’re sure to find vehicles to will meet your particular needs and budget.