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Wonderful Opportunities on Buying a Salvaged Vehicle, the Pros & Cons, & What to Look Out For so You Don’t Get Defrauded!

There will come a time in most car’s lives when their repair costs exceed the value of the vehicle. This is when it is time to say goodbye.

You will find article upon article to “not” buy a salvage vehicle. However, there are opportunities from time to time. If done right.

I think this article is worthy since many people are looking for a ways to save cash.

And believe it or not, you can find a decent deal with a salvage car. 

What Causes a Vehicle to Become Salvaged?

There are a number or reasons a vehicle may become salvaged which are listed below.

1Flood damageFlood-damaged cars sometimes get a salvage title. Some states will specifically call out flood damage on a car's title, but other states merely use the term "salvage title."
2Hail damageSame as Flood. Will be seen as salvaged on the title.
3Theft recoveryAfter a vehicle has been stolen and is missing for a certain period of time, the insurance company will pay off the vehicle.
4VandalismIf someone spray-painted or overturned a vehicle and caused enough damage, the car could get a salvage title.
5Non-RepairableA severely damaged and non-operable vehicle with no resale value other than its parts can get a "non-repairable" designation, which some states call a "junk title."

Some Opportunities to Think About Before Junking Your Vehicle

There are a number of avenues you can take when looking to relieve yourself of your old battered car, such as Junkmycar.com, however one of the most cost effective can be to sell your car for scrap.

There will most likely be a number of auto salvage parks in your area who will be happy to buy your car from you.

Although you may not make massive returns on this, it is a quick and easy way to get rid of your unwanted car and get a little bit of cash for it at the same time.

Before and after shot of a salvaged vehicle.

Image Credit: AutoAuctionMall

Note: With a little creativity and resourcefulness you could get a nice deal on a salvage vehicle and restore it more like new. Similar to the vehicle in the image above. With a little time and patience there are a ton of opportunities.

Auto Salvage Buying & How to Make a Buck or Two

On the other end of the spectrum, there is auto salvage buying which can prove very lucrative when done in the right way.

You can often find very good cars that may not need that much work doing or vehicles that are useless as a whole but which still have good quality, sought after parts in good working order.

List of Top Auto Salvage Sites

With nearly 4 million salvaged vehicles per year there is a slew of auction sites. Below is a list of the top ten most reputable ones.

RankWebsiteWhat's Offered
1CopartThey sell vehicles on behalf of insurance companies, banks, financial institutions, charities, car dealerships, fleet operators, vehicle rental companies, as well as vehicles sourced from the general public.
2IAAIThey work with a variety of sellers including insurance companies, dealerships, rental car companies, and fleet lease companies, to facilitate the sale of total-loss vehicles.
3EasyexportProvides a large inventory of salvage cars, motorcycles, boats, trucks, trailers, jet skis, ATVs and snowmobiles.
4eRepairablesThey allow both licensed salvage dealers and non-licensed to bid and you can submit your maximum bid and their system will do the rest.
5RideSafelyThey also offer inexpensive used cars for sale that carry clean titles such as lease returns, former rental cars, and bank repossessions.
6AutobidmasterYou can bid live on cars, trucks, SUVs, boats, and motorcycles and allows to purchase auction vehicles without a dealer’s license.
7SalvagebidAn online auto auction marketplace that provides the general public access to auctions that were previously only available to licensed auto dealers.
8Auto ExportersThey have a variety of rebuildable cars, trucks, SUVs, and motorcycles with a range of damages and other types of insurance losses.
9Ebay SalvageSelection of inventory of salvage cars and parts on eBay.
10Total ResourceA vehicle remarketing company that specializes in salvage, damaged and inoperable vehicles.

Be Wary of One-Off Purchases of Salvage Vehicles

However, if you are looking to buy a salvaged car as a one off purchase and intend to run it as your primary vehicle, you must be very careful and have it checked thoroughly before using it as there may be some very serious underlying problems that you may not have been told about.

About.com’s author, Garth Sundem, has a wonderful article about the pros and cons of salvaged vehicles.

Salvaged BMW for sale at auction.

Note: Illustrated is an example of a decent looking salvage vehicle. If you are willing to put in a little effort you can find a decent deal without a huge amount of repairs.

Finding Out the Exact Damage of the Salvage Automobile

First off you need to learn what the exact amount damage that the car has, from this you will be able to gauge if it is worth the money. CarFax is a good place to start too. 

It may be possible to find this out from the dealer as they will know the cause of salvage, without this information you could end up getting into trouble further down the line as the car is almost certain to have problems.

Below are Steps When You Want to Purchase

  1. Take a mechanic with you.
  2. Ask for the original repair estimate.
  3. Get a vehicle history report.
  4. Plan your budget and financing options in advance of your search.

The Mechanically Inclined Auto Repair Type are Good Salvage Buyers

If you are going to buy a salvaged car, you must be willing to put in some time and effort to get it back up to working speed again otherwise you are going to experience some fairly major issues.

Similarly there are different kinds of crash damage which range from good to bad, A is the worst then it goes to B, C and D which is workable.

Image Credit: http://repairablecars-forsale.com

Note: Most of the Stingray Corvettes for sale have flood damage. The cost is approximately $13,000. You may be able to get one for a lot less. The average price for rebuilt Stingray’s is $35,000 to $125,000.

Top Things to Consider such as Warranty, Financing, and Insurance

Some other things to consider are purchase details things like insurance, warranty, financing etc.

  • The insurance varies by where you live and by the insurer, but you should expect to get at least minimum insurance in most places from most companies.

  • The warranty, this is almost non-existent, in fact it is pretty much set in stone that you won’t get a warranty but there is no harm in trying to go that extra mile with the person you are buying the car from.

  • There is also financing you aren’t going to get finance that is a fact because the car won’t be worth it so you will have to pay upfront this is for definite.

Tips to Consider When Buying a Salvage Car

  • Financing May Be Difficult – Be prepared to pay cash. Since it is difficult to value salvaged vehicles you may not get financing.
  • Run the VIN Number Through Databases – Be sure to run the VIN number through Carfax or AutoCheck to find anything fraudulent.
  • Understand Local Laws – This is a state by state thing. Some states have different requirements and you don’t want to be unaware of any unique local laws.

And Considerations when Buying Auto Insurance for a Salvage Auto

  • You Will Pay More – Don’t expect discounts or a lower premium.
  • Keep All Repair Work – This will help with the insurance company by giving them piece of mind. If possible, get the original repair estimate.
  • Get an Inspection – You may want a mechanic give a once-over on the salvaged car. Also, the insurer may require an appraisal of the vehicle for issuing a policy.
  • Liability Only – Don’t consider getting full coverage for your salvage vehicle. So forego comprehensive and collision and go for liability or minimum coverage only.

List of Auto Insurance Companies offering Liability Coverage for Salvage Titles

I made it easy for you. Below is a list of the top carriers offering liability coverage for salvage title vehicles.

RankCompanyLiability insurance coverage for salvage cars
1AmeripriseYes; inspection required in KS, KY, RI and WV
221st CenturyYes; inspection required in KS, KY, RI and WV
3Everest (Arrowhead)Yes
4EsuranceYes in KY and NC; In CA if you qualify for state "good driver" discount
5The HartfordYes
6InfinityYes; In CA if qualify for state "good driver discount
7National GeneralYes in AL, AZ, MO, NC, NY, PA, RI, WA; In CA if qualify for state "good driver discount"
10SafecoYes in all states except CA
11TitanYes in all states except CT and GA; In MD, will not cover “vehicles with flood or stolen/recovered titles”

Once you have made the decision to buy a salvaged vehicle you will then have to make sure you are purchasing from a reputable seller and you are provided with all the correct documentation to prove that the car is yours after purchase.

Final Thoughts & Tips

It would also be wise to make sure the car is not stolen and that is why you are getting such a good price for this as this can cause serious issues further down the line.

The best place to start looking however, is usually online as this is where you will find the most information on the subject and get the best choices.

And remember this…Once you buy a salvage vehicle you may have a hard time selling it!

Greg Fowler

Greg Fowler

Managing Member of AutoInsureSavings LLC, Greg has been in the insurance industry for 12 years and enjoys rebuilding vehicles. His goal is to help drivers save on anything related to automobiles. Travel and enjoying the outdoors are some of his hobbies. The best way to reach him is at his Twitter or Facebook Profile.

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