Insurance Auto Auction
Insurance companies will often sell total loss vehicles to insurance auto auction companies periodically as a means to dispose of vehicles that were declared a total loss as a result of an accident, flood or fire and a stolen vehicle recovered after an insurance payout.
The vehicles are sold with a salvage title. Most states will issue a salvage title to a vehicle that has sustained damage greater than the current value of the vehicle. Vehicles that have been in a flood will be considered a total loss and subject to a salvage title even though the water damage may be minimal. Vehicles with a salvage title may be difficult to insure due to the nature of the damage involved. Some vehicles with mechanical and structural defects may be considered uninsurable.
That does not mean a vehicle bought at an insurance auto auction with a salvage title is a bad deal. Vehicles purchased at insurance auto auctions are purchased by used car dealers, parts dealers, auto body shops and the general public for the purpose of using the vehicle for parts.
Insurance auto auctions are held just about every day all around the country. Auctions can be found listed in the classified advertisements in the newspapers and a number of car related magazines. A simple web search for insurance auto auctions will reveal a number of auctions in your location. A word of caution is some auctions are open to the general public while others are open to car dealers or a certain group only.
Most insurance auto auction companies have a few rules in place in order to participate in the auctions. Bidders may be required to register for the auction or pay an auction fee. A bidder must be at least 18 years of age and a licensed driver. A financial deposit is sometimes required to bid and is returned if no purchase is made or applied to the sale price if a purchase is made. Purchases are typically payable on the day of the sale along with any applicable sales tax, license and registration fees and any buyer’s fee. All fees are posted on the vehicle prior to the auction.
The title of the vehicles purchased will be transferred to the buyer and sent to the address used when registration took place. Any out of state vehicle bought at an insurance auto auction may be required to get a permit and an inspection sticker in order to transport the vehicle back to the buyers own state via highway. If a permit is not obtained, the title will be transferred to the owner and noted as “Non Highway Use.” It will be necessary to transfer the vehicle via flat bed trailer if it cannot be driven legally. This is especially important if the vehicle suffered only slight damage but was considered totaled.
The buyer of a vehicle will be required to insure the vehicle as the insurance auto auction company is not responsible for any damage done to the vehicle once the purchase has been completed.