A salvage auction sells vehicles that have been deemed a total loss by their insurance company. Because the vehicle is considered a total loss, its value is exponentially less than its present-day market. Salvage auctions act as a venue to buy and sell these types of automobiles.
A vehicle can be given a salvage title for a variety of reasons. The root cause of the title is generally the same and has to do with the insurance company issuing a complete loss. Following are some reasons why a vehicle is given a salvage title:
- Flood damage
- Hail damage
- Total loss
If the vehicle is involved in water-induced damage, such as flooding or hydro-locking, it will either be given a salvage or flood title.
Enough damage caused to the body panels or glass of the car can cause the vehicle to have a salvage title.
If the owner of the vehicle has theft insurance, the company will have to pay the cost of the vehicle back to them. When the vehicle is recovered it can be resold with a salvage title.
Depending on the severity of the vandalism, enough damage can be grounds for a salvage title.
When the cost of the repair greatly out-weighs the market of the car, it will be deemed a total loss resulting in a salvage title.