Understanding Buying To Repair Salvage

There are many who see the process of buying salvage and repairing it as a solution to a cheaper vehicle that can be sold on for a profit, or at least a cheaper motoring solution. The realities for many are completely different though, when the true cost of repairing and making roadworthy are explored.

Let’s start at the beginning

Most cars that are involved in an accident and are not deemed as cost effective to be repaired by the insurance company find themselves at one of the several salvage auctions, in order to recover some of the money paid out as a claim.

Depending on the damage, the car is labelled as a category.

  • X= No or little damage (Often, stolen recovered)
  • D = Smaller amount of repairable damage
  • C = Considerable damage, not deemed as cost effective to repair
  • The B and A categories can only be bought to strip down for spares or must be crushed, scrapped and disposed of.

The first thing to consider, that with the exception of Cat X, all cars are now categorised for the rest of their life and their resalable value is now less, no matter how good the repairs are.

The Buying Process

Because in many cases the value of the parts within the wreck is worth more than the cost value to repair, anyone trying to buy a car will be competing with “breaker yards”, who see the same vehicle as a suitable supply of recycle spares for their customers. This can drive the cost of some vehicles with hard to find spares higher at auction that many would it expect it to go. In fact it is not unusual for some damaged cars to sell for more than a road worthy version, because of the profits associated with certain parts on that vehicle, if there is a suitable demand. Often it is the Mercedes, BMW’s, Audis and other premium brands that can sell well above what is deemed as cost effective.

So in choosing the right car for a project to repair, it is often the models that are not in demand from scrap Yards (which has a double benefit, as it is likely that parts will be cheaper and easier to source), and those that do not have a premium badge as a brand.

Locating Spares

As we have touched on earlier, if a vehicle is in demand by a breaker yard for the value of its parts, it is likely to be an indication that these spares are either expensive to buy or difficult to source. so the message is, that before buying any vehicle make sure sufficient research is one on locating the components as being in stock and the true price of each, starting this process after the sale is too late and likely to catch many out.

More Costs Often Missed

Parts and the cost of the vehicle does not add up to the final cost of any project. Other costs often missed include, trailer transport to get the vehicle from the auction, applying for documents, phone calls to locate spares, petrol and postage to collect or receive components, cleaning materials, tools to work on tit, MOT costs, extras such as oil, brake fluid, tyres and all other small components such as bolts, screws etc. The bad news is that most people doing this for the first time, do not include these extras in their final cost analysis, to what price is a good price to purchase the vehicle.

Success At Repairs

We can’t ignore the professionals who do make money on repairing salvage, but they tend to have certain things in common.

  • Direct access to parts. Obviously “breakers” that already have the parts and not buying these at retail price have a head start. Plus time saved and phone calls trying to locate what is needed.
  • Own their own trailer or vehicle carrier. Again if the collection is done at cost, then there is more money left for the project.

Failing all this, it about taking enough time to buy the right project.