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How Can I Buy Cars at Auction?

By Mike Richards Updated: 03/02/2020 Posted: 02/17/2020

You may be wondering ‘How can I buy cars at auction?‘ – you’ve come to the right place! We will explain the process here, and show you how to access a range of used and salvage vehicles.

Used car auctions are becoming more and more popular because they offer prospective buyers the opportunity to buy vehicles at great prices. Approximately 40.2 million cars were purchased in the US in 2018. This was an increase of about 5.2 million cars from the sales in the previous year. A significant portion of these cars were bought at auctions. The demand for used cars has increased significantly, and auctions are the go-to place for those looking for cheap used cars.

Public Auctions vs Dealer Auctions

First of all, you need to understand that there are two main types of auction: public auctions and dealer auctions. Dealer auctions are typically reserved for car dealers. These auctions are where they get most of their stock, and often feature a lot of salvage vehicles. To enter these auctions, however, you would normally need to be the holder of a dealer’s license, which is out of reach for most ordinary buyers. However, there is a way around this limitation.

These dealer-only auctions get cars from various sources, including rental companies, insurance companies, individual sellers, and companies replacing their fleet of vehicles. Several rental companies replace their vehicles after three years, and some individuals change cars regularly, providing these auctions with a steady supply of vehicles.

If you are lucky, you will discover a car in a public auction that has low mileage and is still relatively new at a great price at public auctions. However, these cars are few and far between – usually competition in these auctions drive up prices.

Although it is easy to assume that a public auction is open to the public, this is not always the case. Some public auctions have sections that are open to the public, while a significant portion of the cars are reserved for dealers only. This means that even in public auctions, there are many vehicles, potentially the best deals available, out of reach of most buyers.

But there is a way for ordinary buyers to get around these restrictions and bid on cars that are normally only within reach of dealers. Auto Auction Mall allows you to ‘piggyback’ on our own dealer license to bid on your behalf. This gives you access to all those vehicles usually reserved for car dealers only.

Steps to Take Before Bidding for Cars

Before bidding even starts, there is some essential preparation you need to do. First of all, you need to set a budget. In this budget, you should set the maximum amount you are willing to spend on your vehicle. Making a list of the vehicles you’d like to buy, together with their estimated value, will help you in this task. You can find the current market rate of the car from sites like Kelley Blue Book. Don’t forget, however, that there are more costs associated with buying a vehicle than just the price. You need to account for expenses like the repairs, shipping costs and auction fees.

The location of the auction is also important when coming up with a budget. If the cars are far from your location, you need to consider the higher transportation costs. It always pays to look at vehicles being auctioned from closer to your location.

If you see cars you may be interested in, look up the VIN. This is one way you can find out more about the vehicle’s history, giving you more insight into potential problems.

Is it Worth it to Buy a Salvage Title Car?

Salvage cars are becoming more popular among people who flip cars for a living, or those interested in getting a car at a low price. Before buying a salvage title car, however, it is essential to find out why it received that title.

Title salvage

Conditions that Lead to a Car Getting a Salvage Title

When your car is involved in an accident, the insurance company will first evaluate the cost of repairs. After assessing the damage and the cost, the insurance company will decide if they should pay the owner the value of the car or repair it. If the insurance company decides that repairing the damage is not worth it, they will write off the vehicle and sell it at auctions as a salvage vehicle.

A car can also get a salvage title if it was affected by a natural disaster such as flooding or a hail storm. You should be particularly careful with cars that got a salvage title because of damage from natural disasters. If the vehicle sat in floodwater for days, for example, there was likely extensive mechanical or electrical damage. Fixing this car may be too expensive.

Some cars also get a salvage title if a stolen car is recovered after an insurance company has written it off. These cars are likely to be in relatively good condition. Nevertheless, it is always essential to consider the actual condition of each vehicle before you decide to bid on it.

How to Determine if You Should Buy a Salvage Title Car

The cause of the salvage title should be a priority when trying to figure out if you should buy a car with a salvage title. For example, if a stolen vehicle was recovered after the insurance company had written it off, you might get a great bargain, especially if the car is still in excellent shape.

If the car was involved in an accident or was affected by a natural disaster, you need to exercise caution when buying it. If the cost of repairing the car will still be worth the investment, then the purchase would be worth your while. However, if the damage is extensive, you might need a lot of time and money on repairs. Sometimes, the car will continue to develop problems long after you think the repairs are completed, especially for vehicles affected by floods.

Vehicle Title

Why You Should Buy a Car with a Salvage Title

When looking at salvage cars, you will discover some with significant damage, while others can be repaired easily. You need to consider why you want to buy a salvage car. Is it for scrap? Do you want to fix it and resell for a profit? Or are you buying the car for your personal use? If you enjoy rebuilding salvage cars, you probably want a car that will challenge your restoration abilities.

There is no doubt that salvage cars are quite cheap, especially at auctions. Some of the owners simply want to dispose of these cars, while insurance companies want to recover as much money as possible. The reasons behind the purchase will help you decide which car will be a worthwhile investment.

Some of the salvage cars can be rebuilt and made roadworthy again. However, what is the cost of getting the vehicle back to great shape? How much will it cost, and will it change the overall value of the car significantly? If the answer is no, then the purchase would be worth it.

Further Reading

Things to Look Out for In Salvage Cars

If you are interested in buying, repairing, and insuring a salvage vehicle, then there are some things you should consider before doing so.

What is Your Budget?

Demand can vary widely, depending on the vehicle. The demand drives up the price of the vehicle, even in the case of salvage vehicles. So it is crucial that you look at your budget, and the maximum you can spend on the vehicle, including the repair costs. Older generation vehicles may be well maintained, but as a vehicle gets older, it is likely to require more maintenance and repairs. This means you need to take into account potential maintenance costs. When it comes to the newer models, with less damage, the purchase price may be the most significant expenditure for a while. All in all, you need to weigh your long-term assessment of the expenses you will have on the salvage car.

Example Auctions Currently Live

Check the Vehicle’s History

The vehicle’s history can tell you a lot about it, often more than the pictures can, especially if you are buying from an online auction. Request the VIN when you identify a car you are interested in buying. You can use sites like Carfax to find out the vehicle’s history. This give you valuable information for the repairs, any other major repairs that may have been done in the past on the car, as well as its maintenance history.

How Bad is the Damage?

Most salvage titled vehicles get the title because the repair costs were not worth the value of the car to the insurance companies. The insurance companies, therefore, choose to replace the vehicle, or more commonly issue the payout, rather than repairing the damaged vehicle. Can you afford the cost of repairs, or conduct them yourself to save money? Besides the price, you need to look what the damage is. For example, the body panels of a salvage vehicle can easily be fixed, but is the frame still solid or was it damaged during the crash? A damaged structure can affect the vehicle’s stability and roadworthiness.

Can You Insure a Salvage Title?

car insurance

Vehicles with a salvage title are more difficult to insure. Most insurers don’t provide comprehensive cover for cars with a salvage title. This is something you need to keep in mind when buying a salvage vehicle. Are you purchasing the vehicle hoping to drive it for years or to flip it for a profit?

In both cases, insurance matters, but sometimes it is easier to find insurance if you don’t intend to sell the car, although they may only offer you the bare minimum coverage. If you are buying to sell at a profit, the buyer will have the same questions regarding insurance, and this may affect your ability to sell the vehicle.

Find out from your insurers if you can get coverage. Some insurance companies make an exception for their existing clients, especially those with whom they have built rapport. Large established insurance companies are usually more flexible. You will want to know this information as early as possible to save time and money.

How do you Repair a Salvage Car?

Every vehicle has its own story, but you must look out for vehicles that have been driven hard. Some car owners garage their cars during long periods of time, and if the engine is not run and maintenance carried out during these periods, then you should be worried about the damage on the vehicle.

Remember – if you buy parts to repair a vehicle, you need to keep receipts and take photos before and after each repair stage – you will need this documentation to re-register the car with your DMV.

Other than any obvious crash damage, as with any car, you need to think about the underlying condition of the vehicle. Seeing in images that a rear bumper and lights need replacing after a small crash may look simple to replace, but what condition is the rest of the car in? This is especially a consideration for older vehicles.

When looking at the history of the vehicle, consider its origin and the maintenance records during this period. If the maintenance records show the vehicle in question was well taken care of, the mileage and age of the car shouldn’t matter much. It would be best to look for a mechanic who understands the type of car you are looking into.

Check Beyond the Obvious

You will want to check the compression, brakes, emissions, air conditioning, and other functions. Find out how well the gears shift, especially in the case of a manual transmission. If the vehicle was parked for some time, you might need to check the starter to see how easily the vehicle starts, and if it runs smoothly. You should consider the possibility of replacing the battery; usually with older vehicles a new battery is always a better option to avoid surprises.

After some time, cars will need wheel alignment and balancing. If the car veers to one side when you loosen your grip on the wheel, or if it drags to one side when you brake, you will need to check the wheel alignment as well as have the brake pads replaced.

When buying vehicles from an auction, whether new, used or salvage, it is very important to learn as much as possible beforehand. If you are not a specialist, then it is highly recommended to consult a good mechanic who can give you insight into the condition of the car you are interested in. In the end, buying salvage can turn out to be a very good deal for you, if you know your stuff.

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