Is It Worth Buying Cars at American Auctions?

by Staff

The American car auctions Copart and IAAI sell a variety of vehicles. As a rule, these are cars that insurance companies sell after accidents (fire, drowning, theft), for which they have paid compensation. Leasing and rental companies and regular American car dealers can also be sellers.

Historically, the Manheim auction sells whole cars with mileage, while the Copart and IAAI sell damaged cars.  But at these auctions, there are whole cars as well. In the “damage” column, they can have Normal Wear, Minor Dents/Scratchers, or Mechanical. To know exactly the entire vehicle history, you can use the FaxVIN service. But the main reason why the price of American cars is attractively low for buyers is primarily the presence of certain problems, which we tried to summarize here:

1. Open recalls

There are many cars from the United States that are not returned to the manufacturer when they are recalled to troubleshoot. These cars, of course, have an increased risk for the buyer, because the buyer does not know what is wrong with the car and how it may affect its operation. Often, ignoring the feedback of the manufacturer, the owners of such cars sell them abroad. For example, there are currently more than 188,000 such cars imported from the United States to Europe.

2. Salvage Title

In North America, this title indicates that the vehicle has been reimbursed by the insurance company, but it can be repaired. Here are the reasons why a vehicle may receive a salvage title:

  • Flood damage;
  • Damage from hail;
  • Vandalism, etc.

Usually, the insurance company sells the car either to a repair shop or to a car disassembly.  If a car is repaired, most states require it to undergo a basic safety test before the car agency can give it a new title.  But even if the state gives the car a new title, future owners know that the car has been saved or restored.

3. Total loss

A car is considered to be destroyed when the cost of repair exceeds the actual cost of the car (for example, in Texas) or a percentage of the cost, which may vary from state to state:

  • in Nevada — 50%,
  • Oklahoma — 60%,
  • Nebraska — 65%,
  • Michigan and Indiana — 70%,
  • Alabama, Iowa, Kansas, Kentucky, Massachusetts, Maine, Montana, New Hampshire, New York — 75%,
  • Florida, Mississippi, and Oregon — 80%.

In practice, this means that if you had an accident on a Toyota Camry worth $4,800 in Oklahoma, the total loss would be a repair worth $2,880 (or 60%) of the cost of the car.

4. Flood Damage

Because many states in the United States are exposed to a variety of extreme weather conditions, the logical consequence of this is that some cars suffer from flooding. Many of these cars are exported to Europe, putting European consumers at risk of operational problems. According to Carfax, more than 13,000 cars with a history of flood damage were imported into Europe from the United States.

5. Airbag Deployment

Another risk factor for car buyers from the US market is airbag deployment. Airbags are often restored at the lowest cost, which means that they do not provide full protection or functionality as promised by the manufacturer. Currently, there are more than 18,000 cars in Europe with a history of airbag deployment that have been imported from the United States.

Finally, it’s your turn to determine if such a car is worth your money. Order a comprehensive VIN check to make your final choice!

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The New Jersey Digest is a new jersey magazine that has chronicled daily life in the Garden State for over 10 years.

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