The automobile has become an indispensable part of everyday living. It clearly is quite impossible to imagine life without one. Unfortunately, not everyone can afford to buy brand new vehicles or even second-hand, used automobiles. At the very least, one can always visit car salvage auctions as these can provide you with a more practical way of owning a vehicle. However, given that salvage cars are those deemed by insurance companies to be total wreck, you really cannot expect these cars to be anywhere close to a road-worthy vehicle unless given extensive repairs. But they do make for great project cars while also providing another source of income fixing salvage cars for profit. The key here is to know how to buy a salvage car. We’ve got 10 tips to get you started.
Make a Thorough Assessment of the Damage
Majority of salvage cars come with damage as a result of an accident or some other incident in which the car insurer decided that the cost of repairs is much too great when compared to the value of the car once the repairs have been made. As such, it is important to make a very thorough assessment of the damage to the car. It is often wise to bring a mechanic who you can trust to make a very thorough and comprehensive assessment of the damage.
For instance, if the damage is in the car’s critical components like the engine and transmission, know that these typically entail expensive repairs or even replacements. If the damage is related to a fire in the car’s interior, then you may have to think about repairing or even replacing the seats and vehicle carpeting or worse the whole interior. Flood damage is another concern as water can get into the sensitive mechanical and electrical parts of the vehicle. Body damage should be clearly visible. A not-so-bad body damage is obviously better than one that resembles a total wreck.
If you’re buying a salvage car for parts, it is imperative that you look at all the individual parts of the vehicle and carefully assess the extent of the damage. Ideally, you’d want these parts to be untouched by the accident so you can still command a respectable price in your buy-and-sell business.
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Get into the Mind of an Insurer
There’s perfectly good reason why the car insurance company gave a salvage title to this vehicle. They know that the overall value of the car will be less than the total cost of its repair. That being said, it is crucial to do some math before making any serious decisions related to buying a salvage car.
For instance, if the salvage car is a relatively new model it usually means that the damage it sustained is so serious that the cost of repairs is far greater than the value of the car. Likewise, if an older car model has been written off as salvage, then this usually means that the damage is not really that major. If you were to be given a chance between the two, you’ll have a much better option in the older car with minimal damage than a new car with more serious damage.
Consider Costs Other than Repairs
It’s not only the cost of repairs that you have to factor in to your decision to buy a salvage car. Having it registered means additional costs not only in terms of the actual process of vehicle registration itself, but more so on the search for an insurance company that will be more than willing to provide insurance cover for a vehicle that other insurers have already written off as salvage.
Even if you do manage to find an insurer, the premium will be higher than other types of vehicles. They have to be convinced that your newly-restored or newly-repaired salvage vehicle is as good and road-worthy as any other car.
Consider Prevailing Market Prices
Generally speaking, salvage cars that have been repaired, restored, or rebuilt typically command no more than 60 percent of a car of the same brand and make but with a clean title. For example, if a clean-titled car is currently rated at $12,000 on the Blue Book, then the highest price that you could possibly buy a completely-rebuilt salvage vehicle is $7,200. If the seller of the car is offering you the rebuilt salvage car for $6,500, then it should be a really great deal.
The same rule can be observed when you participate at car salvage auctions. Your upper limit should always be 60%. You’re not supposed to go more than that. Now, we’re talking about a 100% rebuilt salvage vehicle here – one that needs no additional repairs. If there will still be repairs to be made, then you need to subtract this value from the selling price of the vehicle.
Always Inspect the Car before Purchasing
This is similar to assessing the damage of the salvage vehicle, except that you will be assessing the entirety of the car. As always, it is best to bring a trusted mechanic with you, preferably one who has no ties whatsoever to the one selling the salvage vehicle. This will help you gain a better understanding of the repairs that need to be made.
As for the parts that are still fully functional and have no signs of damage, you can always sell them if you’re into buying a salvage car for parts.
Don’t Forget the Importance of Post-purchase Inspection
Just as pre-purchase inspection is important, it is also imperative that you conduct a post-purchase inspection of the vehicle. This is usually done after the repairs or the rebuilding process. This is a fundamental requirement to make sure that your now-rebuilt salvage vehicle can be registered with a clean title and an appropriate insurance cover.
Choose between Refurbished or One that You Need to Repair Yourself
If you’re into fixing salvage cars for profit, you will have a much better chance with getting a salvage vehicle that you can repair yourself. Different states will have different requirements as to which salvage car repairs are considered essential to make your car eligible for registration. Understand that having a clean title on your rebuilt salvage car can help you sell it for a much higher price than if it doesn’t have clean title.
Alternatively, you can always pick a refurbished or rebuilt salvage car. This is the perfect choice for those who wish to drive their vehicle right away after purchase. If you choose this kind of salvage car, it is important to make sure that it has been duly-inspected and that it is already registered and licensed. It may not be insured yet, so it is best that you complete all the necessary papers before you take it out for a real spin.
Consider Getting a Theft Recovery Salvage Car
Stolen vehicles that have been recovered are also typically written off by insurance providers as salvage vehicles, but only after a certain amount of time has elapsed from the time the car was reported as stolen. This time frame is usually anywhere between 21 and 30 days. What this means is that any stolen vehicle that is not found or recovered within the prescribed number of days is automatically written off by the insurance company. If the car is found after the prescribed time frame, the vehicle is automatically titled as salvage.
Why would you be interested in such a car? There is a possibility that the recovered vehicle is still in good condition, although majority of such cases are often stripped of parts. While the car may look intact and undamaged, it is still best to perform a thorough inspection and assessment of the vehicle to discover any repairs that may be needed. Generally speaking, a theft recovery salvage car offers you the best possible choice to owning a good car without incurring heavy expenses.
Always Obtain the Facts
Make sure to get as much information as you possibly can about the vehicle’s history. The Vehicle Identification Number can be run through the National Insurance Crime Bureau or even Carfax to have an idea into its history such as the presence of a salvage title. You can even check if the vehicle has been reported as stolen but not recovered. These are pieces of information that you should always take into consideration whenever buying a salvage car.
Be Mindful of Where to Buy Salvage Cars
Like everything else, buy your salvage car only from reputable entities. Car salvage auctions can offer you great deals. Sometimes, you can also purchase salvage cars from dealers themselves. You can always ask your friends if they know any of these entities. You can also check with the Better Business Bureau for any complaints lodged against these entities.
Buying a salvage car whether for your own use or as a means to generate income requires a more methodical approach than purchasing a brand-new or second-hand vehicle. These tips should help you make a better informed decision related to purchasing a salvage car.
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