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Buy Cars From Insurance Companies

buy cars from insurance companies
TABLE OF CONTENTS

Buying a vehicle from an insurance company is one way you can find relatively affordable vehicles. Understanding the process for purchasing vehicles this way can help you prepare for the potential risk of purchasing a vehicle that a previous owner totaled. Keep reading to learn more about this process and the factors to consider.

Can You Buy Cars From Insurance Companies?

It’s possible for you to buy cars from insurance companies, though you will not do this directly. The most common way to purchase cars from an insurance company is at an auto auction. This works because an insurer buys a previously totaled vehicle and repairs it based on its total-loss threshold in the crash’s state. After the repairs, the vehicle’s status changes to a salvage title or salvage vehicle. Once the insurer purchases and repairs the vehicle, they place it in an auction to see how much money they can make from it.

You can also find salvage dealers in your area, which some insurance companies use to sell their vehicles. This is a way you can purchase salvage titled vehicles without attending an auction and bidding against other people who want the same vehicles as you.

What Is a Salvage Title?

A salvage vehicle or a salvage title is a vehicle that received repairs greater than its total-loss threshold for the state it’s from. Each state calculates its total-loss threshold differently, so it’s important to research what the threshold is in your state before you buy a vehicle with a salvage title.

You should consider several factors when shopping for vehicles that have a salvage title instead of a regular title. First, the car’s value differs from the same make and model of vehicle that doesn’t have a salvage title. Second, insurance companies and buyers consider salvage titles to be a warning of extensive damage.

How To Buy Cars at Auction

Below are steps you can use to buy cars at auction:

1. Research the Auctions in Your Area

Since the most common way you can buy vehicles from insurance companies is through auctions, researching the auctions in your area is an excellent place to start. It’s important to take this step because different auctions may have different rules for how to bid, how they announce changes to what is on offer, and other factors that impact how you interact with the auction. You may also notice that some auctions are online while others are in-person. For online auctions, you can place bids without traveling to the location, but in-person auctions may require travel to get the vehicle you want.

2. Research the Vehicles on Offer

Another step you can take is to research the vehicles on offer. This is important for a few reasons. First, it lets you learn information about the vehicles, such as how they came to auction, what their condition is, and other important information that can help you decide if you want the vehicle. Second, researching the vehicle can help you find differences between what the auction is offering and what a similar vehicle is like from other sources, such as salvage yards. Finally, you can use your research to learn how you can transport the vehicle to your location.

3. Attend the Auction

The last step of purchasing a car from an insurance company via auction is to attend the auction. For online auctions, this means being available with an internet-ready computer or device at the time the auction takes place. Once you’re attending, you can place your bids electronically and await the results. At in-person auctions, you can travel to the location of the auto auction and find out any important information you didn’t find in your research. Once there, you can place bids in real time for the vehicle you want.

How To Buy Cars Using Other Methods

Below are steps you can follow to purchase vehicles from insurance companies without going to auction:

1. Research Other Methods Near You

While auctions are the primary way insurance companies sell cars, they may also use other methods depending on your location. These can include sending vehicles to salvage yards, where people can purchase the entire vehicle or its parts. Using this method, an insurance company can make a certain amount of money based on the prices the salvage yard uses for its services. Then, as people buy the parts of a vehicle, the insurance company can make money based on those transactions.

2. Use a Search Engine To Find Locations Near You

To find salvage yards near you, you can go online to a search engine and use phrases such as “salvage yard near me” to find the nearest locations. Once you find the locations, you can research them to see what their hours are, how their services work, and any vehicles they may have on offer. You can also find directions to the location, which is important because you are likely to transport the vehicle or its parts yourself from the salvage yard to a location of your choice.

3. Get the Salvage Title Vehicle Inspected by a Mechanic

The last step in this process is to have a salvage title vehicle inspected by a mechanic if the yard allows this action to happen. This is important because a mechanic can tell you what to prepare for with the vehicle and any damage that might have happened in the past based on their inspection. They can also inform you of whether the price of the vehicle aligns with its condition before you purchase it.

With a few ways to find affordable vehicles from insurance companies, it’s important to find the methods that are best for you. It’s also important to research the vehicle you want to purchase to understand its history and prepare for ways that can affect its value and condition for you. Finally, it’s important to remember that insurance companies may not want to provide full coverage for salvage titles because of their history.

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

We’re here to help you simplify car care and save, so this post may contain affiliate links to help you do just that. If you click on a link and take action, we may earn a commission. However, the analysis and opinions expressed are our own.

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About the Author

FIXD Research Team

FIXD Research Team

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.

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