When it comes to buying and exporting salvage cars, there are a few different factors that you should take into consideration.
Automotive recycling is now more popular than ever and presents car sellers, dealers and salvagers with a fresh new market that has the potential for great growth. Keeping these factors in mind can greatly affect the overall profitability and viability of buying and selling salvage cars overseas.
The first thing to keep in mind is that American markets are going to be saturated with new cars and those cars that are used but that have not been wrecked. Most people are going to opt for cars that have clear titles, and those cars that have an extensive maintenance record. This means that exporting these cars overseas is going to offer a far smaller profit margin for those salvagers making it far more profitable to stick with salvage titles.
In most cases, buying cars that have clear titles is going to be more expensive as well, since they are not going to be going to auction for low prices like salvage cars. Again, this greatly lowers the resell value and the potential for profit even if you are exporting to overseas locations.
Selling salvage car overseas presents a market where it does not matter as much if the car has a clear title that has not been salvaged because the overseas market is not nearly as saturated with new cars as the US market is.
This makes overseas a perfect market for salvage cars. You can buy them for a small amount of money (cash) here and resell them for a markup when they arrive at their new destination. These cars are also going to be more readily received overseas, where the new car market is not nearly as swollen as it is in the United States.
There is far more potential for profit in the overseas market. On top of that, buyers from other countries can get these salvage car titles and cars for a fraction of the price, repair them up, and resell them in their own country for a markup.
How Does the Process Work?
The process starts with the initial auction. These auctions can take place in a wide range of circumstances. Many are going to take place in salvage yards where cars are either brought after they have been damaged in a wreck, have been bought from dealerships as the result of trade-ins, and more. These auctions are going to offer cars at a fraction of the price that they would bring if they were being sold new or if they were being sold for sticker price at a dealership.
Cars are often sold every month at auction in order to keep inventory moving and to keep their inventory low so that they can get new cars as needed.
When international buyers are interested there are a few different options. In some cases, there is a proxy that bids for the international buyer making the process much easier for the buyer. In other cases, deals can be made over the phone or over the internet to purchase several cars at once and have them shipped to the country of purchase.
Whether the cars are bought at auction or bought in bulk, they will then go through the proper authorities and be shipped to their new home.
Why Is This Beneficial?
Buying salvage car titles and cars is beneficial for overseas buyers for one simple reason: they are able to get cars for a low price, fix them up, then resell them for a markup and get great cars into their country. Many buyers from regions like the Middle East, North Africa, and former Soviet Republics commonly buy these salvage titles and salvage cars for resell in their own countries.
Buying foreign cars and then having them imported also helps the business owner to get cars straight to their dealership for quick resell without having to wait for the government of their country to allow the purchase of cars that are manufactured there. Buying American salvage cars gives these countries a fast inventory of cars for a great price.