Insurance companies sell damaged cars through auto auctions. Vehicles that are about 80% damaged are usually considered beyond repair and deemed "totaled" by the insurance company.

After a car is considered totaled, the car's owner receives a payout for the value of the car. They can either retain salvage rights and buy back the car or give the car to the insurer. Cars that remain with the insurer are sold at an auto auction.

Auto auctions have impounded, repossessed, and abandoned cars for sale. To find one in your area you can do an internet search, check your local papers, or even call tow yards for more information. Online auto auctions are also available if you want to buy a car from the comfort of your home.

Key Takeaway Insurance companies sell salvaged vehicles through auto auctions.

Car insurance for salvage vehicles

Unfortunately, many insurance companies don't offer

comprehensive

and

collision coverage

for repaired salvage cars. This is because they’re considered less safe due to extensive prior damage.

Liability insurance

is mandatory for all drivers, no matter the vehicle. If you want collision and comprehensive coverage for a salvage car, you’ll have to check to see what your insurer offers.

Here are the average annual liability car insurance premiums by state.

State	Price before Jerry	Price after Jerry
AL	$1,830	$979
AR	$2,101	$1,508
AZ	$1,563	$1,266
CA	$1,741	$1,064
CO	$1,854	$1,665
CT	$2,431	$2,283
DC	$1,990	$1,483
DE	$1,669	$1,592
FL	$2,369	$1,792
GA	$2,316	$1,871
IA	$1,660	$1,100
ID	$1,255	$608
IL	$1,654	$1,315
IN	$1,486	$842
KS	$1,782	$771
KY	$2,116	$1,701
LA	$1,947	$1,723
MD	$2,384	$2,647
ME	$1,916	$1,064
MI	$2,198	$2,786
MN	$2,097	$1,604
MO	$2,022	$1,541
MS	$2,129	$1,154
MT	$1,250	$408
NC	$1,951	$1,523
NE	$1,027	$1,102
NJ	$2,549	$1,883
NM	$1,367	$775
NV	$1,980	$1,287
NY	$3,478	$3,692
OH	$1,090	$783
OK	$1,255	$648
OR	$1,995	$1,401
PA	$1,926	$1,458
RI	$4,550	$1,672
SC	$2,274	$2,011
TN	$1,398	$1,010
TX	$1,913	$1,145
UT	$1,614	$1,334
VA	$1,647	$1,246
WA	$1,555	$1,161
WI	$1,287	$581
WV	$1,482	$948
WY	$1,200	$528

MORE:

Do I need to get a safety check for my salvaged vehicle?

What is a salvage title?

Totaled vehicles receive a salvage title when the amount of damage exceeds their value. Salvage title vehicles cannot be legally driven or insured until they’ve been rebuilt and passed a safety inspection.

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How much does a salvage vehicle cost?

Salvage vehicles are typically worth about a quarter of their list price. If your car would be worth $10,000 in the

Kelley Blue Book

, its purchase price with a salvage title might be around $2,500.

Prices can fluctuate at auction depending on the bidder and the car’s demand. Before going to auction, set a budget and don’t bid beyond your set maximum.

Remember, too, that salvage vehicles usually need extensive (and expensive!) repairs. You’ll want to determine the repairs needed on a vehicle before buying it. In some cases, the repairs might cost more than the vehicle itself.

MORE:

Should I buy a car with a salvage title?

Title washing for salvaged cars

If you’re considering buying a salvage vehicle, it’s important to be aware of title washing.

Title washing is the illegal practice of changing a car's title status and "wiping out" a vehicle's history. Salvage cars are given a clean title and the potential buyer is unaware of the previous damage.

In addition to being illegal, this practice can be incredibly hazardous. Salvaged cars may not be structurally sound and typically have some serious issues that make them unsafe to drive.

The

National Motor Vehicle Title Information System (NMVTIS)

protects buyers from accidentally purchasing title-washed vehicles. They use five key indicators to help prevent title washing:

Current state

Brand history

Odometer reading

Total loss history

Salvage history

Each of these factors contributes to keeping you safe from purchasing a potentially dangerous vehicle.

Key Takeaway Title washing is illegal and leaves buyers unaware of previous (usually serious) damage to the vehicle.

MORE:

How to get rid of a salvage title on your vehicle

How to find cheap car insurance

Purchasing a salvage vehicle can lead to an expensive and time-consuming insurance situation. You can’t insure a salvage vehicle until it’s been repaired—but even then, it can be difficult to find the right coverage. The

Jerry

app makes it fast and easy.

Jerry can provide you with competitive quotes in under a minute, and swapping is just as effortless. As a

licensed broker

, Jerry takes care of all the paperwork and phone calls, and even cancels your old policy on your behalf. And did we mention that it’s free to use?

"Better coverage, lower price, and questions still just a phone call or text away. You can’t afford not to try. What do you have to lose?" —Jerry user

Can you buy salvage cars directly from insurance companies?

Yes, you can purchase salvage vehicles through an auto auction.

Where can I buy damaged cars from insurance companies?

Insurance companies sell salvage title vehicles at auto auctions, which can easily be found locally through a quick online search. Alternatively, you can find online car auctions through companies like

Copart

How does buying a car back from insurance work?

If you want to keep a totaled vehicle, you’ll need to retain your salvage rights and then buy your vehicle back from your insurer. Your insurance company will sell your vehicle back to you at a fraction of the original value.

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