Buying a Car at an Insurance Auction: Is It Worth It?

Auto auctions are great venues for finding stellar deals when you're looking to buy a used car. But you may also run the risk of getting a car that is not in such good working region. This is certainly a risk you will run if you decide to participate in an insurance car auction. The main reason a car would be in such an auction in the first place would be due to its being damaged in an accident. Therefore you should know a few facts about insurance auctions for vehicles.

There are different types of auto auctions, you see. An auction may consist of government seized cars and vehicles repossessed by lending institutions. There are even auction lots that specialize in classic or luxury vehicles. But an insurance auction handles cars that have been involved in traffic accidents. These cars were declared by their owners to have been wrecked beyond reasonable repair. In other words, the vehicles were totaled. In such cases, the insurance company, following their policy guidelines, must pay the car owner the relevant insurance amount for the wrecked auto. Since the owner has no further need of the car, the insurance company will take possession of it and then attempt to dispose of it through an auction.

The insurance auction of cars is generally not open to public bidding. This type of auction is normally held for salvage yards, dismountlers, scrap metal dealers, and the like. But on occasion there may be public auctions as well. This usually involves vehicles that are not so damaged as to be practically scrap metal. The cars for auction are still wrecks, but they may have salvageable parts. Indeed, some cars, if auctioned off to an auto shop that carries a lot of parts, may even be made to work again with a massive overhaul.

It should be clear that an insurance car auction is not for the casual auto buyer. The people who can benefit from such auctions are those who have certain specialties. As noted above, an owner of a mechanic's shop would have a major advantage in having the expertise, the equipment, and the parts to get a severely damaged car back in working condition. Even so, the car would never be in a first-class condition again.

So why would you want to buy such a car, if you can not get it to run as good as it did before? There are a number of possible reasons. One good reason is that it may be the only way someone can get to own a rare vintage automobile. Even a badly damaged classic car may be recoverable, at least in appearance. In such a case, the working condition of the car is less important than its collectibility and nostalgia value.



Source by Joseph Ducat