Buying a salvage vehicle can be a great investment, but by nature, it’s going to be a very risky investment for the vehicle buyer. A salvage car is just that; it’s a car that has been deemed as being totaled by the insurance companies. When a car is totaled, that means that the total value of the car after it has been damaged is for less than what it would cost to fix the car, or in a lot of cases, the car is worthless. Most worthless cars are simply sent to junk yards to be destroyed, or picked apart for salvage parts to sell. But when a car has been determined to have some worth, it will be sold by various means.
The most common means of selling a salvage car is at auto auctions. In general, auto auctions are venues where salvage cars, along with repossessed cars, are sold to the highest bidder. Most auto auctions are strictly for auto dealers, but some are open to the public. If you are an auto dealer, these venues are a great opportunity for you to buy salvage cars for dirt cheap prices, fix them up, and then sell them to receive great profits.
If you are a member of the public looking for a good deal on a car, then auto auctions can work out for you. You will certainly be able to get the car that you’d like at a low price. But there are drawbacks for the private buyer. The main thing is that repairs will have to be paid for. There is no way that a person can buy a salvage car, and not expect to pay for the repairs. In many cases, the repairs will be extensive. If a person has money sitting around to invest in the repairs, then the price will work out for them. If the private buyer is on a strict budget, then buying a salvage car might not be in their best interest. The repairs will be too high. Even if the car is able to drive off the lot, and even if the car is able to function at first, the owner might find that the car will seem to break down bit by bit. They will constantly have to have the car in the repair shop. By the time that they are finished paying for each small repair, they would have done much better to invest in a new car, or at least a used car that isn’t so old.
If a person is looking to start a business in reselling cars, then buying salvage cars can work in their favor. They will certainly need to have money set aside to repair the cars so that they can be sold at a profit. They will need to have contacts with great mechanics, or they must be very skilled to repair vehicles themselves. They also need to be able to dedicate a lot of time in repairing the cars. Many people buy salvage cars, repair and remodel them, and then resell the cars via auctions for collectors. Lots of profits can be earned in this way.