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How to Buy a Salvage Car from a Used Car Auction?

By Mike Richards Updated: 08/09/2017 Posted: 10/23/2015

Salvage cars can represent a significant opportunity for savings. Maybe you’re a used car dealer looking for a steady source of low-cost vehicles to repair and sell to low-income customers. Maybe you’re just a devoted car enthusiast who loves spending nights and weekends restoring old junkers to working order once more.

In the end, the salvage car, a vehicle that many believe to be destined for the junk heap, can be yours for just pennies on the dollar, ready to come alive once more in your hands.

The Life of a Salvage Car

If you’re not familiar with the concept of a salvage car, it’s relatively straightforward: in the event of a vehicle suffering enough damage to make it cost-prohibitive to repair, the company that insured the vehicle will attempt to write off its value by declaring it totaled and convincing its owner to accept a payment for the car itself.

The insurer will then haul the car away and try to regain as much of their investment as possible – sometimes through selling it to a salvage yard where it will be parted out or melted down. However, many insurers will take these salvage vehicles and attempt to sell them at auction in order to recoup their losses.

Why Salvage Cars are Great Deals

You might think that buying a vehicle that’s been damaged to the point of being totaled doesn’t make much sense, but the truth is that salvage cars can be great deals. It all depends on how the vehicle was declared salvage, as each state in the United States has different laws regarding salvage vehicles.

Some states require the damage done to a car to exceed 75 percent of its value before it can be declared salvaged, while others might have a lower threshold of 60 percent or even just 50 percent. This makes it less expensive to restore a car from a lower-threshold state than from a higher-threshold one.

Additionally, some cars can be declared salvage even if they’re not damaged in any way – a car that was reported stolen and then found sometime later might have been written off in the interim, which means that even if it’s recovered with little to no damage at all, it’s still going to end up as being classified as a salvage car.

Additionally, almost every state requires insurers to take into account labor costs when it comes to determining how expensive it would be to repair a vehicle.

If you are going to be doing the repair work yourself, or you can absorb the costs because you own your own auto body shop or you have a dealership with a service bay, this represents another route to savings as well. If you bought that salvage car with an eye towards rebuilding it and then reselling it at a profit, that’s even better news for you.

Buying Salvage Cars at Auction

The best place to buy salvage cars is and always has been at used car auctions. These, however, are not without risks.

There are ways around some of these risks if you attend a used car auction in person and you have the working knowledge of a skilled mechanic at your disposal, either in the form of your own expertise or the knowledge of an employee at your side.

You can conduct a brief visual inspection of the car or cars you’re thinking of bidding on to see what sort of repair work might be needed, and then use that to inform your decision as to how much you’re comfortable bidding for each vehicle.

Be aware, though, that vehicles sold at used car auctions are almost certainly sold as-is. There are no guarantees  given on used cars, and certainly not salvage vehicles.

Also remember that a salvage car cannot be legally driven until it’s been certified as rebuilt. In fact, you’re going to have to ensure you can transport any salvage cars you buy from the auction venue by a covered trailer or a flatbed, as it’s even illegal in many states to tow a salvage car if its front or rear wheels would be touching the highway.

Online Auctions Are Open to You

You can also bid on salvage cars online as well, as there are many car auction websites that offer these vehicles regularly. You won’t be able to physically inspect them in the same way that you would if you were visiting an auction in person of course, but if you find it impossible to get away from your day-to-day activities to travel several hours both ways to the nearest auction, it’s an advantage.

Of course you won’t be able to have your new purchases trailered back to your driveway or used car lot in person if you’re not there to do it. Thankfully, the majority of used car auctions provide shipping and transportation services for a nominal fee.

Since you’re already getting that salvage car for a low price, paying just a few dollars more to get it transported to your address is not going to represent a big additional expense. Just make sure you set enough money aside for whatever replacement parts you’re going to need to bring your new salvage car back up to spec.

Find information on Rebuilt Title Laws for Each US State. Explore our Vehicle Auctions, as well as finding more information about How These Auctions Work.

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