About Insurance Auto Auctions

Insurance auto auctions are how the insurance companies attempt to recoup a little money they paid out to owners of damaged cars.  Frequently, the insurance company will declare a car a total loss and pay the owner for damage that has occurred, for example, flooding.  They then become the owner of the car and will resell it at a salvage auto auction.

Dealers, bargain hunters and/or folks who like to tinker with cars are the people that come to insurance auto auctions. “Total-loss” vehicles are sold at these auctions across the nation through various auto salvage auction companies.   Once the salvage auction company obtains the vehicle, it undergoes detailing, vacuuming and shampooing before it is sold. Sometimes additional steps such as flood damage recovery, shrink wrapping and patching are necessary.  The company wants to make the car as appealing as possible for buyers.  In many cases, the cars at these auctions need little or no repair, leading to outstanding bargains. 

An example would be a large car dealer who suffers flooding, with several new cars partially underwater.  The insurance company will declare the cars a total loss and pay the dealer for the cars.  They sell the cars to an auto auction company, who then resell the cars with salvage titles to bargain shoppers and dealers.  Another good example is a car that was stolen and not immediately found by the police.  The insurance company would pay the owner of the stolen car and when police find the car, the insurance company is then the owner.  These cars are usually in good condition. 

Auctions are held almost daily across the country, usually close to large cities.  Some of the largest companies are IAA, Midway Auto Salvage Auctions and Auto Salvage Auctions, Inc.  You can search the Internet for auctions held near you and to check the requirements. Some companies only sell to car dealers.  There are also companies that allow you to bid online.  The rules and procedures will be posted right there on the website.