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What Should I Know Before Buying a Salvage Car Online?

By Mike Richards Updated: 08/05/2017 Posted: 10/24/2015

One of the best ways to buy a salvage car is through a used car auction website. It’s cheap, it’s convenient, and it doesn’t require having to spend all day in an uncomfortable, crowded auction venue. However, before you pull the trigger on that salvage car you found online, there are some important things you should know. Here are just a few tips that you need to keep in mind.

Unique Laws Govern Salvage Cars

A salvage car is a vehicle that has suffered enough damage it’s not cost-effective for an insurance provider to repair. Depending on the laws of a particular state governing salvage vehicle classification, any car that suffers damage equivalent to anywhere from 60 percent of its value to as high as 90 percent of its value can be legally declared as “totaled,” which will let an insurer write it off by presenting a check to the owner for the value of the vehicle.

At this point, depending on the extent of the damage, insurers can either sell the car directly to a salvage yard or they can attempt to regain some of their investment by putting it up for auction, either in person or online.

Salvage Cars Need to Be Restored to be Driven Legally

If you do buy a salvage car from an online auction, it’s going to need to be delivered to you on a flatbed trailer, even if it’s still mechanically sound enough to be driven. That’s because of what happens when a car is declared salvage. It loses its regular title, gets one branded with “salvage” instead, and becomes ineligible for registration or insurance coverage until it’s rebuilt.

The process of rebuilding a salvage vehicle also differs from one state to another, much in the way that the rules governing how much damage it takes to “total” a car do. Most states will require the owner of a salvage vehicle to not just repair any damage but also have the car inspected by a state official as well.

In some cases you may need to document the entire restoration process photographically. In others, you need only present bills of sale or receipts for the car and the replacement parts you needed to complete the repair. If you pass this inspection, you’ll be given a new title that is branded “rebuilt salvage,” making the car eligible to be insured and registered once again.

Why Even Buy a Salvage Car in the First Place?

There are many reasons why you might want to buy a salvage car from an in-person or online auction. The primary one is cost, as salvage cars are very cheap to buy. This means that you may be able to purchase and repair a salvage car for less than what you would have spent on the same make and model of used vehicle if it wasn’t declared salvage, even after you take into account the costs of reconstruction.

This is especially true if you plan on doing all the work yourself or you can somehow otherwise absorb the labor costs associated with the rebuild. Insurers use average labor costs as part of the damage assessment when totaling out a car, so that means there’s plenty of room when it comes to spending money on parts to fix the damage done.

Know the Risks

If you are planning on buying a salvage car at auction, please be aware that this has its own risks. Most cars at a used vehicle auction are sold “as is”. You might not be able to get your money back if the vehicle you purchased has much more damage than you thought it had based on a visual inspection or a vehicle history report.

Also, buying online means you can’t actually trailer the car back with you personally, but instead have to pay the auction house or a carrier to transport it for you.

Despite these possible disadvantages, the vast majority of salvage cars can be a worthwhile investment if you plan on re-selling it after it’s been restored or if you want to find a very inexpensive option for a personal vehicle thanks to your own mechanical expertise. It’s not for everyone – and certainly not for the faint of heart – but it can be a rewarding experience.

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