How Is It Possible To Make Money on Totaled Cars?

By: Harris
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If you are passionate about cars and want to make a business out of trading in cars, you could consider salvage cars as it offers many benefits. It does not take a large investment to buy cars that have been totaled by the insurance companies. It is possible to get very reasonable returns on investment if you have the necessary skills to repair the cars and make them roadworthy again or even if you just sell the parts and the scrap. The business outlook is extremely positive as a larger number of cars are being scrapped every year due to prohibitive repair costs and more people are also looking at salvage cars due to the price advantage they enjoy over new or used cars.

Just What Are Salvage Cars?

Essentially, salvage cars are vehicles that have had their insurance cover paid out to the customers. The reason could be damage that entails repairs that are costlier than the worth of the vehicle or a stolen vehicle that is recovered after the insurance payout has been made to the owner. In both the cases, the insurance company assigns a salvage title to the car after taking possession. There are also some cases where the insurance company may pay out even if the repairing cost is less than the value of the certified pre-owned cars simply because it’s more convenient. An old car even if it’s lightly damaged may end up being totaled by the insurance company. It is thus quite possible that cars with salvage titles may not necessarily be very severely damaged and be worth far more than the value of the scrap. By buying salvage cars, there are potentially three ways of making money; selling it after repairing it, selling the components and spares, and finally, selling the scrap metal.

From Where Do You Buy a Salvage Car?

Insurance companies do not usually sell totaled cars directly to individual buyers and prefer to sell them in bulk to various auction sites, which then conduct physical or online auctions from where dealers or even individual buyers can buy the cars. As an entrepreneur, it is far more convenient for you to focus your attention on online auctions as they usually carry very large inventories. Usually, you will be able to locate one in your area so that you do not incur the extra shipping costs. Because you get all the details of the cars, you can conduct your own investigation into the history of the car to ascertain its value better and decide whether you should buy it or not.

Conclusion

Before establishing a salvage car repair business, it is also important to know the pitfalls. Since a damaged car is not roadworthy, you will have to get it certified again by the DMV that it has been repaired properly. You should also warn your customers that finding comprehensive insurance as well as finance for salvage title cars can be quite difficult due to their low book value. The resale value of salvage cars is also nearly absent.

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