By on January 4, 2016

Escort_wreck_006

Salvage and rebuilt vehicle listings on Craigslist (and other classified sites) are ubiquitous. They often manifest themselves as late-model metal with low prices and even lower standards of ad copy.

But have you ever wondered how those vehicles end up on Craigslist in the first place? What happens to a salvage or rebuilt vehicle between the time it’s sold at auction and its first appearance on your local classified site?

Before the auction

The perception of a rebuilt salvage car leads many to believe that an unscrupulous someone found a wrecked car, sprayed it with a fresh coat of paint of dubious quality, then listed it on Craigslist. The reality, however, is very different — at least for sellers who are reputable.

After a vehicle is involved in a collision, an insurance company assesses the damage and decides whether or not the vehicle can be repaired within certain financial constraints. If that insurance company deems the damage too extensive (and too expensive), the vehicle’s owner is paid out and the vehicle is sent off to a salvage auction — most times.

In some cases, once a car is deemed a total loss, the original owner may opt to buy back the vehicle before it’s sent to a salvage auction. In the case of modified vehicles, the owner may know full well that parting the vehicle out will net more cash than the cost of the buyback. However, if the owner passes on the buyback option, the vehicle goes off to the auction where it can be picked up by dealers, junkyards, exporters, and even the general public in some cases.

Getting access

My first foray into car sales was in flipping salvage cars. I learned about the insurance auctions from a friend and quickly paid the $200 fee to join Insurance Auto Auctions (IAA) as a public buyer. This type of membership has one main restriction: Public buyers can only bid at locations marked as public auctions. We were lucky in that all six North Carolina locations were designated as public. The majority of the auctions located in neighboring South Carolina and Virginia did not allow public bidders.

Once you’ve found a location that allows public bidding, you can then only select vehicles marked for public sale at that auction. The few clear-title vehicles that come through are usually marked non-public unless they have a current emissions inspection. Public bidders are usually restricted to wrecked or theft recovery vehicles.

The other large salvage auction house is Copart. It has a similar public/non-public setup, but offers a free registration option allowing you to bid up to $1,000 on a qualifying vehicle as long as it’s marked for public sale. If you wish to bid on more expensive metal, you will either need to deposit 10 percent of your maximum bid or upgrade to their “Premier” membership. This membership option costs $200 to start and requires a $400 refundable deposit, but allows you to bid on all qualifying public vehicles.

A few days after I paid my fee to IAA, the registration was processed and I had a login for a national network of auction houses. My father and brother joined in my pursuit and we started the hunt for our first flip.

Kicking tires because that’s all you can do

The run list for each auction site is posted a few weeks in advance allowing you to check out basic information and a few pictures online. Once you’ve selected potential vehicles, you can drive over to the auction site and check out the vehicle in person if it’s close enough. Most of the auction sites only allow a cosmetic inspection and do not allow starting or driving the car even if it is marked as a run-and-drive vehicle.

Each vehicle is different, but they all follow a similar pattern for small-time flippers. Our first vehicle was a 2001 Ford Explorer. It had run into another car and received damage to its hood, grille, right fender, right headlight and front bumper. The body damage seemed fairly light, but the key factor in its low starting price was it being listed as a non-starter. Those vehicles, since mechanical issues are much harder to diagnose during a walkaround, typically garner less interest from bidders, which results in fewer bids and lower prices. We figured it might be a good place to begin our journey since the financial risk was low; the Explorer would likely sell for just a few hundred dollars.

While on site at the auction preview, you should take better pictures and record parts that might need to be replaced. In the case of our Explorer, I started the list with the body parts I had initially recorded and added a few trim pieces we noticed in person. I also inspected the engine and starter for any apparent damage since it was a non-starter, but everything seemed in order from the visual inspection.

This information is used to calculate the parts costs to repair the vehicle and formulate a maximum bid. My starting budget for a salvage vehicle usually started by calculating potential sale value by looking up sale prices for non-salvage examples of the same vehicle and then setting my sale price at 60 percent of that price. In the case of our Explorer, which was going for around $6,000 at the time, we aimed for a post-repair sale price in the $3,600 range. I took out the cost of the body parts, which I calculated to be around $800, along with the cost of a replacement engine if needed, which was approximately $1,100. I accounted for $400 in transportation fees along with $200 for registration. This gave me a $1,100 total bid ceiling if we wanted to break even. We decided to bid up to $500 so as to earn a $500-600 profit.

Putting your money where your mouth (or finger) is

Once you’ve selected the vehicle you wish to bid on, you can show up at the auction in person or bid online from home.

Visiting the live auction gives you a chance to hear and see the vehicle drive through the lane and also allows for a few seconds to make a decision on bidding. Bidding online is a little riskier as you do not get to hear the car, but instead only the voice of the auctioneer. We bid on the Explorer through the online interface since we all needed to work on the day of the auction. Logging in for the first time is confusing and listening to the auctioneer is just about useless if you don’t understand the lingo. However, we were able to secure the winning bid on the Explorer at $400.

We went in blind and now had to pay for the Explorer. The auctioneer could have announced other damage or restrictions, but we had no idea what he was saying through the web stream. During the next few auctions, we decided to go in person to learn a bit more about the process. I highly recommend that anyone starting out should attend in person as much as possible as it will better prepare you for bidding later on.

If you are lucky (or unlucky) enough to have the highest bid, be prepared for the fees.

Our $400 bid on the Explorer came with an additional $100 auction fee, $55 internet fee and $20 pull out fee, which brought the total to $555 — or $55 above our budget. We asked about the pull out fee and were told it was for the forklift to transport the vehicle from inside the yard and place it on our trailer. This seemed unfair since the auction house restricts public access to the yard, but we paid the fee since there was no other way to get the vehicle.

Once the vehicle is paid for in cash or wire transfer, you can send a tow truck to the site or drive your own trailer there and pick it up.

Getting your hands dirty

I researched the Explorer online and found out it had a fuel pump inertia switch configured to pop when in an accident. We got excited when the car arrived and we noticed that the switch was popped. We reset it and hooked up a jumper box. The Explorer started right up.

salvage2

Each state has different laws on registering a salvage vehicle, but many follow a similar model to my state. In order to register a salvage vehicle in North Carolina, it needs to be inspected by the DMV before and after repairs. A common misconception is that this inspection checks if the car is roadworthy. In reality, it’s only to ensure that stolen parts are not used in repairing the vehicle.

Since this inspection has to be performed at a DMV location, the car needs to be towed there before repairs commence. It also gets towed back to the DMV in order to get its final inspection once repairs are complete. The inspector examines the parts, checks the VIN plates and signs off so the car can be registered. The final inspection is fairly cursory and usually done in about 15 or 20 minutes as long as all VIN plates are intact and your stack of receipts matches the repairs.

With the Explorer finally in my garage, I examined what could be repaired and what needed to be replaced. Since we were able to get the Explorer started, our potential profit automatically increased by $1,100 as we no longer needed to replace the engine. Our original parts list was almost spot on and the only unforeseen item we ended up purchasing was a radiator support.

The next week or two is spent sourcing parts from local junkyards, parts websites and Craigslist. I use Car-Part.com heavily as it allows me to search most of the local junkyards simultaniously. We were able to find another Explorer in the same color nearby and made a deal to purchase most of the front end parts for $500. I also found a local body part supplier that sold new aftermarket parts. We purchased a radiator support and headlight from them for another $200. Even with the added radiator support, we were still under budget. Our total investment at this point was around $1,300, much lower than our original $2,500 estimate.

In the beginning, I tried to find used parts from junkyards in a matching colors in order to save on paint and time. However, I’ve developed a relationship with a local body shop over time and it paints some of our cars. Sending a vehicle in for paint allows me to buy new, cheap aftermarket body parts and fix other smaller imperfections, but doing so usually adds another week or two to a vehicle’s repair time.

The cost of paint varies depending on the quality of the work. I had a local MAACO-type shop that would paint any car for me for $280, but I would have to prep work ahead of time. Those paint jobs are single stage and did not have the luster of a paint job with true clear coat — which is totally fine for sub-$2,000 vehicles. I also have a very experienced painter who will match OE colors and repaint some of our more expensive vehicles. These jobs can run anywhere from $200-300 for repainting and blending a small body panel to thousands of dollars for bigger jobs. Carefully selecting the type of paint job is critical in making sure we can actually make money on some cars.

Insuring against what’s already happened once

The next step is to call your insurance company, add the car to your policy and head off to an inspection station to get an emissions inspection. Insuring a salvage vehicle can be limiting in certain circumstances as some insurance companies will not insure the vehicle for anything more than liability. Costs are usually similar to insuring a similar clear title car for the same coverage, but liability insurance only protects other parties and helps you meet the minimums of the law. With all of this paperwork in hand, I would head back to the DMV and pay the registration fee and finally get a tag for the car.

Now that the car is legal to drive, I usually drive it around for a week or so to make sure it’s free of mechanical issues. Luckily, our Explorer did not exhibit any issues and, other than an oil change, no mechanical intervention was required. I then cleaned up the Explorer and took some pictures of it to post online.

Since the price listed is usually 30-percent lower than comparable non-salvage examples, calls usually come in quickly. Most of the first round of calls is spent repeating that the car is a rebuilt salvage vehicle as listed in the ad and telling people that they need to check if their bank will finance a salvage vehicle since many don’t.

I usually kept pictures from the auction as it helped to ensure the potential buyer that damage wasn’t major before the repair. The sale of the vehicle would usually happen within two to three weeks of the original listing, which would be anywhere from four to eight weeks after bidding on the vehicle.

I took the approach of fixing the vehicles like I would if I were to keep them, but many of these sellers take shortcuts. I’ve personally seen vehicles with hundreds of pounds of body filler and drywall screws holding up body panels, so be careful. These cars can coast through with the sub-par repairs since state inspections don’t check the quality of the work. Although I sold salvage rebuilt cars for a while, I do not recommend purchasing salvage vehicles second hand as it’s hard to nail down a good set of variables to check on the condition of the car. If you insist on buying a repaired vehicle, ask for pictures of the car before the repair and make sure to check all of the repaired areas. I also recommend checking any underlying components as many times re-builders will repair only the most visible portions of damage.

Flipping these cars is a lot of work and seems like it might not be profitable. In the end, we decided to list the Explorer for $3,900 and ended up selling it for around $3,500, giving us a tidy profit of $2,000. This number does not account for the hours of labor we put into it and I was foolish not to account for it at the time. The experience pushed us to buy more salvage cars and repair them. We flipped six cars in that first year and only lost money on one — a Dodge Stratus we bought online, which looked good initially but showed extreme sludge in its 2.7-liter engine once we picked it up. Instead of fixing it, we turned it right back around and listed it for sale at the auction.

Getting to know people at your local junkyards and body suppliers is helpful, along with knowing what parts interchange and how to change them out. Car-Part.com is a great source for seeing parts interchange along with RockAuto, which lists interchange on specific parts across all the models and brands that it fits.

salvagelot

Ultimately, we decided that our enterprise could get a big boost if we got licensed to open a dealership and proceeded down that route. Getting a license and an actual lot gave us the benefit of a floorplan so that we did not have to lay out cash and, most of all, it allowed us to start buying cars at standard, clear-title auctions and reduce some of the work.

Next time you see a salvage car on Craigslist, you’ll now have a better idea of how it got there and how it may have been repaired.

If you have any questions about rebuilt vehicles or repairs, feel free to reach Bozi at [email protected]. If your question is relevant, we’ll have Bozi answer it right here.

[Image credit: Top – By Karrmann (Own work) [GFDL or CC-BY-SA-3.0], via Wikimedia Commons]

Get the latest TTAC e-Newsletter!

52 Comments on “From Auction to Flip, This Is How a Salvage Car Makes It to Craigslist...”


  • avatar
    NoGoYo

    I know that fuel pump switch, it failed in my Thunderbird and had to be bypassed for the car to start.

  • avatar
    sproc

    Very interesting, but do you have a rough estimate of the man-hours spent not just wrenching, but part shopping, multiple trips to the DMV, etc.? All that towing would add up, too. Seems like a tough way to make a buck unless you’re doing it in volume.

  • avatar

    “Getting a license and an actual lot gave us the benefit of a floorplan so that we did not have to lay out cash and, most of all, it allowed us to start buying cars at standard, clear-title auctions and reduce some of the work.”

    And that’s pretty much the end game.

    I know dealers who buy exclusively from the TRA sales and buy damaged rental fleet vehicles. You would be amazed at how catestrophic some of these cars. Also, many of these cars are sold with CODs – Certificates of Destruction, which means no clear title can be obtained in the US and it can be used only for parts or export…which means it can be rebuild in Nigeria or Benin or whatever, but not here.

  • avatar
    AlfaRomasochist

    I bought a 2006 V70R from the IAA in Denver, though I had to use a broker because that isn’t a public lot. The car was a unicorn, which made it worth saving to me – Sonic Blue with a 6-speed manual, with the rear hatch and bumper smashed in.

    Even on a car that runs and drives like this one they pull it out with a forklift – a GIANT forklift that scoops up the car and hauls it gently out of the insurance lot, then drops it unceremoniously into the parking lot, at which point it’s now your problem.

    For me it was worth the $20 pull out fee just for the entertainment value, especially since I had my little guy with me.

  • avatar
    CincyDavid

    This reminds me of the Wheeler Dealer show where they nominally make money on their flips, but only if they don’t count their labor cost.

    I used to be an appraiser and went through the CoPart yard in Bridgeton MO on many occasions…all sorts of interesting stuff goes through those salvage pools.

    • 0 avatar
      CoreyDL

      I don’t like that show, it really bothers me.

      Restoring this Saab 900 only took $2,000! So easy to change out all the electrics and fit a new headliner and sunroof panel. And get new seats.

      *Ignores 240 man hours work.*

      • 0 avatar
        sproc

        It’s a great show as long as you can suspend disbelief on the profitability of their flips. It’s a joy to watch Edd China work. He gives lots of useful tips even a shade tree mechanic can learn from.

  • avatar
    paxman356

    I donated a 2001 Saturn SW2 to the local Goodwill after it ate some valves and bought a Chevy Prizm for my wife as replacement. About a year later she had a small accident, but with enough damage to total the car. SO I went to Craigslist, and found a 2001 Saturn SW2. It was the same color, but with lower miles, so I thought why not? Loved the first one, this looked even better. But after looking at the miles on the odo (which were right around my old one) I realized it was the engine he put in it that had lower miles. And he was selling it for $500 more than I originally paid for it. No sale.

  • avatar

    Another opportunity to sing the praises of the 1993-1995 Escort wagon. Somehow a more reliable car than the sedan or hatchback.

  • avatar
    Big Wheel

    With all the flooding along the Mississippi, I imagine there are going to be some flooded cars ending up on Craiglist soon.

  • avatar
    PeterKK

    What a great article. Thanks for the info. I am now slightly less horrified by these vehicles. But I still don’t plan on ever buying one, heh. Not second-hand anyway. And if you can find a good dealer, as you sound like, then it’s probably worth the dime to let someone else do the legwork for you.

  • avatar
    CoreyDL

    Well the CTS-V is a no-buy because it has poor people chromed handles and b-pillars. Rather have that old SEL back there.

    • 0 avatar

      It’s actually a standard 3.6L CTS that someone put V badges on at some point. It also came with all of the chrome and some large wheels that were bent. I found some OEM wheels but left the rest of the chrome on it as I knew that there would be a market for it. That CTS was the most labor intensive car I ever worked on. It was sold with an electrical fault and when I got it in, I found out that someone had ripped up most of the dash harness and it took a great deal of time to rewire it and get it running properly. The SEL was a donation car that I put $200 and a few hours of work into for maintenance and actually kept it for a few months to drive myself.

      • 0 avatar
        CoreyDL

        Haha, thank you. That’s even worse! Did the chrome bits and V-stickers not put you off buying? Those would be indicators of a bad prior owner, to my mind.

        Is the SEL any good to drive? Always admire them when I see em.

        • 0 avatar
          gtemnykh

          Corey, check this “beauty” out:

          linkhttp://indianapolis.craigslist.org/cto/5352119154.html

          It has 1980s rapper written all over it.

          • 0 avatar
            CoreyDL

            Before I clicked this, I thought “I hope it’s a 560SEC.”

            Winning (close enough)! Lol, NADA says $10k low value, but I’ll let this beauty go for half that. I’m generous that way.

            The ground effects are awful, as is his… grammar .. . .

            I prefer the SEC in maroon or white, also. And 1980’s Mercedes products need their stock full moon alloys, end of discussion.

  • avatar
    gtemnykh

    Fascinating article, more like these please! I like the budgeting/repair cost breakdown and sourcing cheap parts and all that.

    I kind of want to do something like this on the side at some point, but at a slow pace and with no intention of making real money once my time is factored in. More so just the enjoyment of bring back a car from the brink using some cheap tricks and second hand parts, and then selling it. I love to negotiate and haggle on craigslist, it’s a disease. This is what used to make Wheeler Dealers so much fun to watch.

  • avatar
    Ryoku75

    Well done article, I avoid salvage stuff but at least now I know how they usually start out.

  • avatar
    danio3834

    I’ve done the odd salvage rebuild before and have found success much in the same way. Fully document the damage, repairs and show pictures. Taking the mystery out of the salvage title puts buyers at ease and will net a higher selling price. The main reason people are afraid of salvage title cars is not knowing the extent of the damage or if it was repaired correctly.

  • avatar

    Flood damaged cars can be cleaned up and put back on the road, which of course is illegal.

    Inspect the car for signs of flood damage

  • avatar
    gtemnykh

    Bozi, where would you say the best payoff is? A domestic that’s easy to get parts for with just some light non-structural damage? The inops that you get very extra cheap but take on extra risk with? Cool looking depreciated European luxury makes that faux-ballers will drool over? Japanese cars that are very easy to work on and less prone to time-sucking electrical faults?

  • avatar
    Joe Btfsplk

    How do you deal with deployed airbags? Are used parts allowed? This seems to get little attention in the article.

    • 0 avatar
      redmondjp

      I rebuilt an airbag-deployment car (very light front-end damage but it popped both airbags) and I purchased used airbags (with receipts) and the state patrol had no issue with them.

      Where you can run into additional cost is with the airbag control module or SDR – it’s a one-time use device once any airbag deploys so it must be purchased new. And then, on the 2001 Buick Lesabre that I was working on, you then must take it to a dealer and have it programmed with the vehicle’s VIN in order to get it to work on the vehicle data bus. That was about $500 just for the module and programming right there, not counting cost of the airbags.

      If the car didn’t have airbags, it would have been repaired and the original owner would have gotten it back. Two front airbags deployed meant approx. $4K in additional repair cost on my car.

      • 0 avatar
        Moparmann

        EXCELLENT and very informative article! Airbags and the assorted controllers, panels, etc. are the main reason that I am no longer interested in buying back/repairing my own wrecked cars. I’ve sucessfully & enjoyably done this in the past. My Honda Fit Sport showed up on Craigslist after being declared a total due to 3 deployed (Seat and side curtain)airbags. Even though it had a salvage title, and looked good, I don’t think I could ever be comfortable with it. IMO With the Takata debacle still ongoing, purchasing ANY used car (should) render consideration of the airbag status a part of the purchase decision. Just my $0.02 worth! :-)

  • avatar

    Not only are there only 9 public vehicles listed for my state, it turns out only 2 of them are actual cars. The rest include a boat, a golf cart, a lawnmower attachment, a Gator, and some industrial machinery.

    https://www.iaai.com/Vehicles/Search.aspx?Keyword=Maryland%20public

  • avatar
    mfgreen40

    I have repaired 6 late model( one or two yrs old 3000 to 6000 miles )totaled vehicles . All were bought for me or my sons personal use, none were sold to the general public. I feel I was driving a (new) car for about 1/3 of new price, not counting my labor. These were not easy fixes, 3 needed the frame pulled and one was a hard rollover. I put many miles on these cars with out any issues relating to the repairs. If you know the shop that is is doing the work, I see nothing wrong with buying one.

  • avatar
    30-mile fetch

    Fascinating article, Bozi, thanks for writing it.

    Several dealerships in my area specialize in branded title vehicles, often far more expensive than $3500 Explorers. Stuff like a $28K 2014 Lexus GS350 FSport with only 5000 miles on it. Very tempting pricing until you start wondering just how much damage it takes to total a nearly $40K Lexus. And whether the work was done well enough. And wondering who will finance it. And insure it. And whether the insurance company believes the branded title car you still owe $25K on is only worth $15K if it gets wrecked again, leaving you 10K under water on the payout.

    I’d buy Bozi’s $3500 Explorer, but I don’t believe I would risk it on a more expensive vehicle. However, I see a lot of dealer plates on fairly expensive machines from those branded title places, so a lot of people are risking it. I wonder how it works out for them.

  • avatar
    DeadWeight

    Branded/Salvage Title Cars:

    STOP!

    Do not call, request info, research, mull over, consider, or in any way, shape, or form expend any effort, time or consideration on, NO MATTER WHAT.

    Just skip, pass, and MOVE ON.

    PERIOD1

    It’s so easy, a chimp could do it.

    • 0 avatar
      dal20402

      This is good advice…

      …UNLESS…

      you are very handy with a wrench and multimeter. If you’re capable of spotting subtle indicators of damage and fixing “advanced” issues, then you can take on the challenge of finding that unicorn car that got a salvage title after cracking a bumper.

      • 0 avatar
        DeadWeight

        In an era of unibodies & tightly packed engine compartments, vehicles involved in accidents sufficient enough to earn Branded/Salvage title status is an extremely high risk/low reward/high PITA proposition that’s just not worth it…

        …IMO…

        …and I didn even get around to flood/water damaged vehicles yet.

    • 0 avatar
      krhodes1

      Meh, I have bought two salvage title cars, and had very good luck with both of them. The first was a theft recovery ’91 BMW 318is. It had been stolen and stripped of all the “is” bits. Spoilers, wheels, seats, etc. That was enough to total a then 8yo car. Owner bought it back and replaced the missing bits with used parts and pocketed the difference. Sold it to me a couple years later. Great car.

      Second was one of the best deals I have ever had on a car period. ’00 Saab 9-5SE V6T wagon. Hit in the driver’s door, set the seat bag off on that side. Was 4 years old with 40K on it. A shop in Oklahoma City bought it as a “make work” project for in-between other jobs. Fixed it over time, then sold it on eBay. I paid $8K for it when my local dealership had an identical non-salvage one with more miles for $19K. Beautiful car, I kept if for four years/50K and sold it for $7500, by which time the going rate for them with 90K on was about $8500. Can’t beat that with a stick. It was a very trouble-free car the entire time.

      So like any used car, caveat emptor. There are gems out there, and there are turds. Up to you to decide which is which. In Maine, there are no particular special anything for salvage title cars. They just have to pass inspection like every other car. And I never had any insurance issues. The only issue I had was Saab refused to do the “free” 60K timing belt change on the 9-5. Which was OK, because I wanted the pulleys and tensioner done too, and they wanted more to do that along with the “free belt” than my indy mechanic charged me to do the whole thing. $tealers, got to love them.

      • 0 avatar
        DeadWeight

        You have the luxury of 1) knowledge, 2) experience, 3) time, 4) passion, 5) perseverance and other attributes in amounts very few do, so you are probably the exception that proves my rule above.

        And even with that said, you’d probably dismiss further investigation into probably 95% of branded/salvage title vehicles based on description or first inspection out of hand.

  • avatar
    stevelovescars

    The problem I have is with the way in which a lot of sellers describe these cars. I think a lot of potential buyers don’t even know what “salvage title” means. When asked, sellers often say that the car was just in a “minor fender-bender.” I’d be really concerned about the ultimate safety of these cars, personally. I’m surprised they sell for as much as they do. I would have thought 50% of clean title best-case.

    I went to look at a used Saturn about 10 years ago when I lived in Sacramento. A girlfriend was looking for an inexpensive car and thought it looked like a good deal.There was no mention of the salvage history in the listing. However, I could see from the curb that the car had been repainted a color Saturn never offered (solid black on an SL1 and the previous black rubber bumpers were also painted, badly). Anyway, I looked at it and it appeared that the car was made of the front of one car and perhaps even an entire rear of another. When I pointed some issues out, the seller told me that the car had some “minor damage” in the rear. Then I opened the hood and pointed out that the wheel wells were all wavy from a front-end collision as well. I encouraged my friend to run away, but I assume some poor schnook looking for cheap transportation eventually got taken.

    I can’t find it now, but I saw a video a few years back about salvage cars from the US ending up in Russia. The airbag spaces were usually filled with plastic garbage bags, if anything. Cars that would never be legal for sale here were sold without any disclosure over there. Then again, carfax.com is accessible from anywhere with an Internet connection, so unless VINs are also changed, perhaps this is harder to do now than it used to be.

  • avatar
    28-Cars-Later

    This article… that’s gold Jerry! Gold!

    “Our $400 bid on the Explorer came with an additional $100 auction fee, $55 internet fee and $20 pull out fee, which brought the total to $555 — or $55 above our budget. We asked about the pull out fee and were told it was for the forklift to transport the vehicle from inside the yard and place it on our trailer. This seemed unfair since the auction house restricts public access to the yard, but we paid the fee since there was no other way to get the vehicle.”

    “Since this inspection has to be performed at a DMV location, the car needs to be towed there before repairs commence. It also gets towed back to the DMV in order to get its final inspection once repairs are complete. The inspector examines the parts, checks the VIN plates and signs off so the car can be registered. The final inspection is fairly cursory and usually done in about 15 or 20 minutes as long as all VIN plates are intact and your stack of receipts matches the repairs.”

    So I’m pretty much reading all of this as fee, fee, fee. Seriously though you paid $175 in auction fees not including your various costs to join (haven’t bought in five years, but Manheim’s fees were $250 for a two yo car at the time). Then you would pay two tow fees to screw around with zee DMV and its “inspections”. Then after any reconditioning costs have the privilege of paying registration, private insurance (min $400/yr in the great state of PA) and also here you would have to get it inspected and emissions checked (costs vary, figure $60 at the absolute cheapest). I realize your automotive *privilege* (hat tip to JB) allowed you to have a truck and trailer thus to save the tow fees and resources to store/repair the product, but for most this is a non starter from a business model standpoint. Believe me I’ve thought about it. Much risk involved and by the time you’re done for sale you’ll just have every buyer low balling you on the retail end.

    • 0 avatar
      krhodes1

      I have one more amusing salvage title car story. Friend of mine, Hungarian guy living in the states, bought an advertised as TMU non-running ’05 Saab 9-3 from Copart. Paid with his credit card, and had it towed up to Maine from CT (~$2K with the tow, IIRC). Turns out, it had full documentation of the dealer-done instrument cluster change out in the glovebox, and it wasn’t running because the battery was toast. So it isn’t TMU as far as the State of Maine is concerned, and thus did not get a branded title here. And somehow, Copart never actually ran his credit card. It’s been 5-6 years now, he still has never been charged for the car. And he is still driving it as his airport beater.

      He is way more of a risk taker than I am – 10 years ago he bought a totaled ’99 Porsche 911 cabrio in Texas and had it shipped home to Hungary, where his brother’s shop rebuilt it on the relative cheap. Did a decent job of it, that car is now back in the states for summer fun. Best part is he got his employer to ship the car both ways along with his other household items as he moved back and forth to Europe a couple times.

  • avatar
    05lgt

    Awesome story, keep them coming please.

  • avatar
    vaportrail

    Good article. My SO wants an Elantra GT, and a very low mile example popped up at half the price of new. Salvage, of course. The seller had no photos of damage to share. Pass.

    Everything else seemed legit, but I just can’t put a non gear head girlfriend in a car that might have issues. Did the airbags blow? Were they replaced correctly? Simply not worth the risk, and I love a good deal more than most.

    I’m surprised no one has mentioned it yet but salvage titles also cancel any remaining factory warranty.

  • avatar
    DenverMike

    My only experience in it was at 16 when a wanted a later model 5.0 Mustang, but with just the part-time job in high school, it wasn’t happening the normal way.

    Back in ’85, they had these used car lots of just totaled wrecks, readily for sale to the public. Cash only. Bought an $800 ’79 5.0 Mustang that drove straight, just needed a front clip, core support, radiator, fan, paint.

    Ended up back at the lot and picked up a T-boned base Mustang for $500 with all the parts I needed. I had a blast doing it with no regrets. Spent $1,700 total, with everything but my labor. $4,000 car at the time.

  • avatar
    pwrwrench

    Anyone considering buying a vehicle with any connection to “salvage”, wrecked, crashed or otherwise damaged should get it inspected by a technician familiar with the make and model.
    I’ve seen plenty of cars that had cosmetic repairs done to bent body panels with nothing done to fix the bent suspension, motor mounts, cracked transmission and so on.
    Most buyers don’t want to crawl under a car to look for bent bits and don’t know what to look for anyway.
    Back when I was in the car biz a young guy that worked for me wanted to get a car for his girlfriend. They had a low budget. Now you might think that he, having worked on cars for 5 years or so, would know better, but they ended up buying a low miles Escort from a body shop. They were told it was a total and repaired, but never checked it thoroughly. Later the car was found to wear one rear tire to the cord in about 1500 miles. They asked me to look at it. I quickly found that the mounts on the unit body for the rear suspension were bent. No measurements needed, you could see it.
    He took the car to a frame shop for a repair estimate. About $5000 in today’s money. They kept buying cheap tires and later sold the Escort.

    A customer sent a friend into the shop with a VW bug they had just bought. It was about 12 years old at the time and I could see that it had been repainted. The new owner wanted a “tune up”, wish I had a nickle for every person that had just bought a used car and wanted a “tune up”. Usually, as in this case, they needed a little more.
    I opened the engine lid. The engine was from a car at least ten years older and missing important parts of the cooling shrouds. Turned out to have low compression also.
    But Wait There’s More. Sitting in the driver’s seat I noticed what looked like a weld bead in the dash, going right through the place where the speedometer mounted.
    Upon opening the front trunk it was obvious that the car had been pieced together from at least 4 different bugs. There were weld beads with different color paint on either side. Since this was a Super Beetle with the Macpherson strut suspension it was likely that the upper mounting points for the struts were no longer where they should be.
    I suggested that the car be returned to the seller for a refund. The new owner insisted on a repair estimate. I did a quick scratch list of the really obvious stuff, never did look at the brakes or see if the transmission worked properly. The repairs would be well over twice what the person had paid for the car. I pointed out that a good running bug of similar vintage could be had for less.
    They took the car away and I forgot about it for about a month.
    I recognized it when it came in the parking lot, but a different person got out.
    It was a rather big guy and he was quite upset that we had told the former car buyer “some lies” about the car.
    After a brief heated discussion it was clear that this guy who claimed to have “fixed” the bug was either ignorant or a crook.
    He continued to argue. I told him to leave or I could call the cops and the Bureau of Auto Repair, who take a very dim view of unlicensed people doing repairs for money.
    Never saw him or the car again.
    The potential buyer did find a good bug.
    CAVEAT EMPTOR

  • avatar
    davew833

    I buy cars all the time from the Copart auction in Salt Lake City, Utah where I live for family and friends. I have a business license for a non-auto-related business, but that allows me to bid on salvage title cars as well as clean title cars. Copart allows you to start the cars in the yard and put them in gear to see if they move a little if they’re sold as “run and drive” but that’s it. All auctions are conducted with the vehicle in place, there’s no driving them over the block like a live auction, and no seller announcements. Copart’s swallowed up most of the smaller local auctions I used to attend, and they seem to handle donated vehicles for all of the charities, as well as buying vehicles from private individuals to resell, and, of course, the insurance salvage cars. It’s great to be able to bid on an auction from your smart phone, but the Copart add- on fees are steep. Last fall I bought an 07 Subaru Outback wagon with light rear damage and the fees broke down as follows:

    SALE PRICE $675
    Title Fee $50
    Buyer Fee $140
    Virtual Bid Fee $39
    Gate Fee $30

    For a total of $964 which does NOT include local sales tax which Copart does not collect.

    The frustrating thing about Copart is that their auction process is heavily biased toward the seller. Sellers that sell through Copart can change the terms of the sale up to and during the auction, and even after you have agreed with their initial terms. They can withdraw the cars from sale at any time, even during live bidding. Sometimes you think you’ve won a car and it just disappears from the website, only to reappear later in a new auction. Your only means of communicating with the seller is through Copart. It can be very frustrating.

  • avatar
    Athos Nobile

    Down here, the state government requires the car to be fixed following OEM procedures with comprehensive photo records of the repair process. Then a roadworthy certificate needs to be obtained and then the car can be registered and sold. That means $$$. A solid profit can still be made.

  • avatar
    TDIGuy

    I have stumbled across a few dealerships that buy off lease luxury cars that were in accidents during the lease. Since the Carfax shows when the accident occurred and that it continued with the same owner, would there be any different caveats in that situation? Prices are usually 2-3k cheaper than a comparable model.

    Slightly OT: I know one of the big buyers of rebuilt salvage cars around here are the local “dream drive” businesses. They charge $200 or so for three laps around a race track. Since the car is not licensed doesn’t have to pass the same inspections.

  • avatar
    rustyra24

    I just bought a 91 Lexus LS400 for $139.00 from Copart. I just wanted the engine for my Celica project. It runs and drives but has frame damage up front. I thought it was a good deal. Probably put the seats in the Celica as well.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Vojta Dobes, Czech Republic
  • Matthew Guy, Canada
  • Kamil Kaluski, United States
  • Seth Parks, United States
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Moderators

  • Adam Tonge, United States
  • Kyree Williams, United States