There are thousands of auction cars offered by Copart at any one of their 100 plus auctions of cars all over the United States every day. You may wonder how all these cars end up at an auto auction for sale as opposed to being sold in other ways. Most cars at auction come from only a few sources, which are usually auto insurance companies, finance or lease companies, donations and city or county governments. You can go to SalvageAutosAuction.com, a sister site of SalvageReseller.com, and view all of these cars from the comfort of your home or office. You can search an auction for cars that interest you, or just do a general search by make or model. This blog will focus on cars at auctions that come from insurance companies and finance or lease companies:
Auction Cars from Insurance Companies
On an average day in the United States around 17,000 vehicles are involved in accidents that cause damage deemed to be not repairable. An insurance company deems a vehicle a total loss when the cost to repair the vehicle to pre-accident condition is more than 70 to 80% of the vehicle’s value on the day it was damaged. While a few people choose to buy their totaled vehicle from the insurance company, most take the check and go buy a new vehicle. The ones that are not repaired are usually located in impound lots, body shops and other places that charge storage fees per day for the vehicle to sit there. Insurance companies want to get as much as they can out of the vehicle to offset the settlement paid to the owner or finance/lease company, so they move these vehicles to an auto auction to be sold.
While an insurance company may want a certain price on a car for auction, in most cases they will sell the vehicle for the most reasonable bid to expedite the sale and save as much on storage costs as they can. Remember that they have spent money paying someone to appraise the damage, have it towed to a body shop in some cases, paid impound and storage fees, and have paid to have it towed to an auction for cars. Their investment into the vehicle can quickly become very expensive. What this means to you is that you can buy a salvage vehicle for much less than it is worth. For people that like to rebuild cars, or need parts for a car they already have, buying a whole auction car can sometimes cost less than buying the parts separately. In most cases, these vehicles will come with salvage titles, which mean they can only be used for parts, or if rebuilt, they need to be inspected by the state you live in before they can be registered and insured.
Auction Cars from Finance/Lease Companies
On average around 8,000,000 vehicles are financed or leased every year. Of those, around 3.6% will end up in default and be repossessed. That means approximately 288,000 vehicles end up on the back of a tow truck headed for a storage lot every year to wait an average of 14 days for the debtor to retrieve them by paying the balance owed and the repossession fees. This number does not take into consideration the voluntary repossessions. These are vehicles that a debtor will turn in willingly because they no longer can afford them or the debtor has passed away. After the finance or lease company follows the proper repossession procedure as determined by the laws in their specific state, the vehicles are taken to auction to determine the amount that the debtor will be required to pay the finance company. For this reason, finance and lease companies will usually set a target price that they would like to get for the vehicle, or depending on the condition, will sell it for the most reasonable bid.
Repossessed cars can be in almost any condition. Depending on the debtor, and how badly they wanted to keep their car from being repossessed, the vehicle can be in extremely poor condition to average condition. In the cases of voluntary repossessions or the death of a debtor, they may be in excellent condition. The only issue is that the bidders have no way of knowing how the vehicle ended up at an auto auction in a salvage car sale. This is where being able to look at the full vehicle description as well as photos on SalvageAutosAuction.com can make it easy to find a car in the condition you are looking for. You can buy an auction car for the fraction of the price you would pay at a used car dealer or a private seller. With the economy the way it is in the past few years, not everyone has great credit or a big down payment to buy a car from a dealer, so buying cars at auctions can be a great way to save money and still get a great car. Another benefit is that most repossessed cars have clean titles, which means as soon as you take ownership and get the title you can register it and drive it.
Summary
Now that you have more information on the source of cars auto auctions like Copart have for sale, the better you can choose the type of auction car you may want to purchase. In my next blog, I will provide you information on the other sources of cars at auction, but for now, go to SalvageAutosAuction.com and register for an account. Save your hard-earned money when it comes to buying your next car and choose a Copart auction car.