What is Salvage title?

Is a Salvage Dealer Auction a Good Option?

By Mike Richards Updated: 12/27/2019 Posted: 09/01/2017

If you are a car dealer, and you have shopped at auctions before, you might be wondering whether a salvage dealer auction will bring you as many benefits. It will depend on a range of factors, naturally. Many can find success with these types of auctions, but it depends on their business and what they plan to do with the vehicles. The following are a few questions you will want to ask yourself to see if a salvage dealer auction is a good choice for you.

What Is the State of the Vehicle?

Even though the vehicle might be classified as salvage, you still need to think about the condition of the vehicle. For instance, unrepairable means it will never get back on the road. Does it need to have some repairs, and can you make them at your facility or through mechanics you hire? Is the vehicle ready to drive, but it just has a salvage title? All these different conditions could still be good buys for certain sellers. It all depends on the types of vehicles you need to run your business, which leads us into the next question you need to ask.

How Will You Use the Salvage Vehicles?

What do you plan to do with the salvage vehicles that you buy? This will dictate what state the vehicles can be in when you purchase salvage vehicles from the auction. If you are going to be selling the vehicles that have a salvage title, they need to be working or they need to be fixable so you can get them running and then sell them. If you are only buying the car for the parts that it has, then the condition will not matter at all, as long as it has enough parts to justify the cost.

How Much Is It Worth?

As mentioned, you need to consider how much the vehicle is worth before you start bidding. If you are going to sell the parts, you will need to consider how much you could possibly get for each of the pieces that you plan to sell. Will this make up for the amount you spend on the vehicle and still net you a profit? Of course, the leftover parts can always be scrapped, which will help to increase the amount you can make. If the vehicle is repairable, how much will you have to spend to get it into driving condition?

Have a number in mind that you believe you could get for the vehicle, and use this when you start bidding. You always want to leave room so you make a profit, naturally. Spending too much on vehicles at a salvage dealer auction is a surefire way to turn you off from this process.

As you can see, a salvage dealer auction has the potential to be a good choice for you and your business. You just need to take the time to answer the above questions and then buy wisely.