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Insuring Your Salvage Car Internationally

By Mike Richards Updated: 08/16/2022 Posted: 10/19/2015

There are a number of pros and cons about buying a salvage car which varies according to the person who is buying it and their reason for choosing a car with a salvage title. According to the Automotive Recyclers Association, things have changed a great deal. With the advent of the Internet on selling salvage vehicles, in what volumes, and who is buying them.

Today, people from around the world have access to many public auction sites. This is one reason why the volume of salvage cars people buy and ship to other countries continues to grow. However, when you live outside of the United States, you need to consider the rules in your own country on how to insure the salvage vehicle you have bought in the United States.


Insuring a Salvaged Car

Typically, a vehicle receives a salvage title once it has damage that will cost 75% to 100% of its value to repair. The exact amount that an insurance company uses to determine that a vehicle is a total loss depends on the legislation of each specific state. The insurance companies declare the vehicle as salvage to the state and take possession of it, compensate the owner, and sell the vehicle, usually at auction.

It is important that you understand your responsibilities when buying, selling, or fixing up a salvaged vehicle. People in the United States who purchase a salvage vehicle and fix it up may be able to apply for and receive a new “rebuilt” title. Even so, the history report will always state what happened to the car that caused it to be salvaged.

In the United States, any car, including rebuilt salvage cars, that is to be driven is legally required to have insurance coverage. At the very least, you are typically required to have liability insurance to protect other drivers in the event you are involved in an accident. Considering the low price that you may pay for a salvage car, this may seem adequate to you.


Determining the Cost of Repairs

Even if you get a really great deal on a car and do the repairs yourself, you could end up investing several thousand dollars into the final project. Liability insurance is not going to cover your vehicle even if you are able to obtain it. Many insurance companies will not provide any type of insurance on vehicles with a salvage title.

Comprehensive and collision insurance are even more difficult to obtain. In the eyes of the insurance company, the value of the car continues to be that of a salvage car, even if it is now in perfect running order.

Kelley Blue Book explains that any “clouded” title will always have a negative impact on the vehicle’s value, typically between 20% and 40% of the value listed by the vehicle authority. In the event that you do find a company that will give you full coverage, expect to pay much higher premiums. Unlike clean title cars that are less expensive to insure when they have a lower value, salvage cars are the opposite.


Buying an Auction Car Internationally

In many countries, once you registered the rebuilt salvage car you bought in the United States, the title becomes clean. This may make insuring the vehicle easier. However, as laws differ widely between countries, you must first research and understand the specific legislation of the country in which you live so as to avoid any problems.

The United States has much stricter laws and insurance standards than many other countries with regard to salvage vehicles. In fact, this is a standard that doesn’t even exist in most countries. The vehicle’s repairs can be legal and inexpensive. The person gets a good quality car. At a price that is low enough to compensate for any auction and/or transportation fees.


Variations in Old and New

Every year, buyers flock to showrooms to see the new vehicle models for the upcoming year. Many will trade their cars in for a new one every two, three, or four years. In many cases, vehicles that are salvage are at most ten years old. In poorer countries, these vehicles are thought of as new. Making them even more desirable to international buyers.

This may also affect the way insurance companies in those countries assess the risk and value of a salvage car. Making it easier and less expensive to get insurance coverage for a rebuilt salvage car than in the United States.

In the United States, car insurance is not optional, but mandatory. An accident with an uninsured car could result in extreme debt. That might have to be paid off by the driver at fault over time. Also, results in loss of driver’s licensure, or even criminal charges.

Some other countries might not be as strict in their insurance laws. However, this obviously depends on the specific country you are living in. As in many countries, car insurance is mandatory and the rules are as strict as in the United States.

The most important thing to do when buying a salvage car from the United States into your country. Is to check with your local authorities. Also, it is advisable that you contact insurance companies even before you make a purchase, so as to become familiar with their rules and requirements.

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