Judy Rae

Used vs Salvaged Car Auctions

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If you’re thinking of buying a car and want to save money, there are two actions you can take. You can obtain a used car from a dealership or visit a salvage auction. Both options have their advantages and drawbacks. So, before you make a decision about acquiring salvaged or used car, you need to make a research. 

In this article, we’ll discuss pros and cons of used and salvage cars, so that afterwards you can make the right choice and buy a vehicle that meets all your requirements. 

Selection of cars

If you think that you have ever faced the problem of choice, you probably never visited online salvage auctions. There you can find any vehicle at any taste and price. But how do salvage auctions get all those stuff? 

They collaborate with various insurance companies that deem damaged vehicles as a total loss and send them to salvage yards. Due to this collaboration, auctions are capable of offering an extensive selection of cars. In addition, the list fills up with new lots every week. 

On the other hand, used car dealerships have more partners. They buy vehicle form salvage auctions, private dealers, and individual owners, repair them, and resell to the end customers. Unlike auctions that accept cars in any condition, dealerships are more careful when it comes to selecting lots. So, the less rich amount of goods is compensated by their higher quality. 

Price 

Usually, price is the determining factor when you choose a vehicle. Overall, salvage cars are cheaper than used cars, however, you should take into account their condition and think about the associated costs, such as repairs, transportation, and buying a license. 

Used cars are sold in better condition than salvaged vehicles, but they are more expensive. Dealers take care of repairs and general condition of used cars, however, these spendings are already included in a vehicle’s final price. 

Fees and commissions

Dealerships have a goal to earn on commissions. So, if you’re likely to buy a used car, be ready to pay a 20-25% margin that dealerships set for their vehicles. Sometimes, it can be even higher, up to 50%, depending on the quality of repairs and transportation expenses. 

At a salvage auction, you’ll need to pay a service fee: a flat price or about 10-15% of a sale price. An interesting fact: when you buy a salvage car from a broker who partners with a big auction (Copart, IAA, etc.), you’ll need to pay service fee both to that auction and a broker. However, the commission applied by a salvage auction is still lower than a margin of a used car dealership. 

To sum up

If you live by the rule “less is more” and ready to pay a higher price in order to reduce a chance of buying a non-repairable vehicle than a used car is a good option for you. But if you really enjoy searching for a needed item among dozens of other stuff or if you like to fix broken cars, consider buying a salvage car. Just pay attention to details and discover as many facts about your potential purchase as you can. Keep safe and find your dream car!  

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