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What Should I Know about Buying Salvage Cars at Auction?

Date: 10/24/2015 |Category: Car Auctions, Salvage Cars

If you’re in the know when it comes to cars, you might have heard of a class of vehicles called salvage cars. These vehicles start out as regular cars, trucks, and SUVs only to gain the “salvage” classification when they’re written off by an insurance company after they suffer enough damage to make them not cost-efficient to repair.

The process is more commonly known as having your car “totaled” after an accident, and a car owner who gets their vehicle written off are given a check by their insurance provider, who then hauls the car away and turns the car’s original title in for one branded as “salvage.”

Insurers may sell the vehicle for scrap in order to recover a portion of their costs, while in many other cases an insurance company will collect all the salvage cars they have and periodically offer them for sale at a used car auction. If you’re considering picking up your own salvage car from an auction, here’s what you need to know about these vehicles.

Why Would You Even Want a Salvage Car?

Any car with a salvage title is illegal to drive, even if it’s still in a drivable condition. This makes purchasing a salvage car questionable for many, but the truth is that there are many uses for a salvage car.

Every state in the United States has specific guidelines for repairing one of these cars and putting it legally back on the road. This means that anyone who buys a salvage car can have it rebuilt to roadworthy status and then either drive it themselves or re-sell it in an attempt to turn a profit.

The former motivates hobbyists and do-it-yourself mechanics who enjoy getting their hands dirty on the weekends as a fun project, while the latter is usually the purview of used car dealers who can refurbish these cars and sell them on to consumers looking for an ultra-cheap used car.

You might ask yourself how anyone can turn a profit on a salvage car, since an insurer wrote it off as too expensive to fix. The truth is that not every salvage vehicle is damaged to the point of being destined for the trash compactor. In fact, in many states the threshold for declaring a car “totaled” can be damage equivalent to as low as 60 percent of its overall value in repair costs.

Additionally, these calculations include not only the cost of parts but of labor as well. In the case of a used car dealership that has its own service bay, dealers can absorb the cost of labor by having its own mechanics do the repair work.

Likewise, a hobbyist doesn’t have to pay for labor because he or she is performing the repair work personally, which means that the only outlay of cash will be for replacement parts. This makes restoring salvage cars more cost-effective than many people would think.

How to Buy a Salvage Car at Auction

Used car auctions are the best place to find a salvage car. These auctions occur both at physical venues and online. Combined with the fact that used car auctions are almost always open to the public, it’s easy to gain access to a large selection of salvage vehicles to choose from.

What isn’t easy is selecting the best salvage car for your needs, though. Unless you go to an auction in person, either by yourself if you’re a mechanic or with an employee mechanic in tow, you’re not going to have much of an opportunity to review the vehicle to see what kind of damage you’ll need to repair.

Even if you do get a good hands-on look at a salvage vehicle, it’s often the case that some of the damage done to the car isn’t readily apparent until you pop the hood or get the car up on a lift back at the garage, so it can sometimes be a gamble.

The only mitigating factor is that salvage cars are notoriously inexpensive, which means that even if you do select a salvage vehicle that needs more work than you anticipated, you’re still not spending that much on the car initially – leaving you more of a budget for repairs and rebuilding.

That being said, there are some things to look out for to make your salvage car buying experience less painful. Vehicles that smell a bit musty, feel damp on the inside, or are discolored are sure signs of the car being caught in a bad flood – the kind that few cars can come back from fully even after reconstruction. It’s better to avoid these types of salvage vehicles completely.

Meanwhile, a car that looks completely mechanically sound but has some mild to moderate cosmetic damage might not be too good to be true. These cars are often reported stolen and then recovered at a later date after being written off, so they’re likely to be a snap to repair and re-certify as rebuilt.

In the end, the choice is yours. Just go into an auction situation knowing that whatever salvage car you buy may need repairs to get back on the road and you should be fine.

Find information on Rebuilt Title Laws for Each US State. Explore our Vehicle Auctions and find information on Buying With Us.

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