The Pros And Cons Of Buying On Salvage Auto Auctions
Looking for a salvage car? Learn the pros and cons of salvage auto auctions.
Millions of vehicles are deemed a total loss by insurance companies every year. Those vehicles get a salvage title and then arrive at the junkyard. Salvage auto auctions such as IAAI and Copart handle giving salvage cars a new life by selling them online.
It’s no wonder that buying a car from major US auctions is a choice of many people. Auctions allow them to save money and buy a drivable vehicle for cheap. But is everything flawless about dealing with them?
If you’re thinking of buying a car from a salvage auto auction, you need to understand not only their advantages but also their drawbacks. In this article, we’ll discuss the main pros and cons of buying a car from a salvage auction, so that you can make a sensible decision afterward and buy what you need.
Main pros of salvage auto auctions
Good choice of cars
Salvage auto auctions collaborate with numerous insurance companies and establishments that recover damaged vehicles. That’s why they offer a vast number of cars, SUVs, trucks, boats, and many more vehicles for sale.
Many cars are sold with documents; many are easy to restore and re-issue their titles to operate them on public roads; some of them even have Clean titles.
Salvage car auctions apply starting bids as low as $25, and often those bids don’t increase significantly. As you bid against other buyers in real-time, you can leave the auction if the bids go to high and exceed your budget.
Very often buying a salvage car and spending money on repairs is more profitable than buying a used car from a dealer or a new one from a showroom. Also, there’s an excellent chance to find a vehicle with minor damages at a reasonable price.
A lot of brokers
Usually, big salvage auto auctions don’t work with individual buyers, and you’ll need to have a special dealer’s license to buy cars from them. Good news, there are auction brokers that handle the role of intermediaries between auctions and individuals. They bid on your behalf, take a significant part of the paperwork, and assist you during the whole process of purchase.
Main cons of salvage auctions
Though salvage auctions are great suppliers of cheap and drivable cars, many vehicles from there have a salvage title. To be able to drive such a car on public roads, you’ll have to repair it first, and then it needs to pass an examination at a local DMV. Only after that, it will get a “Rebuild” title, and you can legally drive it.
Also, you’ll have to buy insurance for your car, and many insurance companies refuse to deal with salvage vehicles as they don’t see any value in them.
No ability to inspect a car
When you choose a salvage car on an auction online, you can only see its photos and read the shorts description of its characteristics. The main disadvantage here is your disability to inspect a car physically and find hidden damages.
Some auctions and brokers, however, can offer you to purchase inspection of a car, for an additional price, but again, you’ll have to entrust your savings to a mediator.
Salvage cars are cheap, but you should keep in mind that their price at an auction is never final. Salvage auctions charge a bunch of associated fees, such as auction fee (about 5% of the purchase price or a flat rate), documentation fee, and others. Also, you’ll need to pay for picking up a car from the auction yard and shipping it to the desired destination.
Buy or not to buy?
Buying a car from a salvage auto auction is quite a challenge. However, there are many benefits too. If you’re looking to save some money, ready to spend time and cash on repairs, and don’t consider searching for an insurance company as a problem, then it’s the right decision for you.
It’s a good idea to explore different auctions before making a final decision. Pay attention to the auction’s reputation and be attentive reading a vehicle’s description. A little research will help you find a car that you really want.