Buying A Car From A Junkyard

Most of the cars in a junkyard are there for one reason – they have been written off, or scrapped, by insurers because they have been damaged in some way, and the repair is too costly to consider in terms of their market value. Not all the damage is accident-related, and some may still be mechanically sound.

There’s real potential in these cars, and they offer fantastic opportunities to buyers willing to restore them, break them up for the value of their spare parts, or use them as donor vehicles when restoring a better version of the same model. How does one buy a car from a junkyard?

What Are Junkyards, And How Do They Work?

Junkyards are also known as salvage yards, and that’s a better description because their stock is anything but junk and has a great deal of value. This stock is bought in from insurers or owners of vehicles that have been damaged to the extent that they are no longer usable. The cars have little value to the owners but are worth a lot more to the junkyard because:

• They can be broken up and the individual parts sold to auto repair shops or members of the public looking for parts at a lower price than that asked for new parts from a dealer.
• Once all parts have been removed, the remaining metal is crushed and sold to a metal recycling plant,
• The vehicle can be sold as a complete car to someone who is able to repair it.

What Are The Benefits Of Buying Used Cars From A Junkyard?

There are definite benefits of buying a car from a junkyard, but these will depend on your reason for buying it – are you going to keep it complete or break it up?

Breaking up the car into its major components is time-consuming, but if you intend to use the parts to repair or build a project car, you’ll save a fortune by using your junkyard car as a donor. The parts you don’t need are also worth something, and you might end up actually making a profit!

Getting the salvage car back on the road might involve a lot of repair work, but if you’ve bought it cheaply, you’ll still score on the deal. If the car you bought is, for example, a stolen and recovered car, or one with hail damage to the bodywork, you could be on the road with minimal costs, having paid way under market value.

What To Look For When Buying A Car From A Junkyard

We mentioned in our introduction that the risks of buying a car from a junkyard need to be minimized, and here’s how to do it:

Check Out The Junkyard

Not all junkyards sell complete cars to the public, but if they do, check out the customer reviews and ask questions, if necessary, to confirm that they are reputable. Like second-hand car salespeople, there are a lot of honest junkyard operations. There are, though, many cases of cars being sold by junkyards without the correct title, and these cars cannot be driven on public roads.

Check Out The Car

There are several ways of checking the car before you buy it. First, use the VIN to get the vehicle’s history on CARFAX, which will tell you details of previous owners, odometer readings, accident history, major maintenance and repair work, and other helpful information.

Secondly, get an independent expert to inspect the car from front to back to uncover any hidden defects or shoddy repair work. Most importantly, ensure that the car was not previously fire- or water-damaged – those are two types of salvage cars to avoid because the damage can sometimes take years to appear. By then, it’s too late to repair.

Thirdly, test drive the car. You may not be able to take it on a public road with its salvage title, but if it’s been repaired, driving it around the junkyard or open space will give you an idea of how the car handles, if transmission and brakes are working, and whether the suspension and steering are in good condition. Clearly, if you’re buying a “non-runner” to work on, this check isn’t possible.

What Documents And Paperwork Do You Need?

If you’ve done all the checks and decided to buy a salvage car from a junkyard, there are several steps to take, depending on whether you want to rebuild the car or buy it as a repaired car:

• If you intend to rebuild, you need to transfer the title to your name. If you haven’t, for some reason, received the title from the owner (the junkyard in this case), a replacement title can usually be obtained from your DMV. You’ll need to submit an application form with full details of the vehicle, together with a bill of sale. A new salvage title will then be issued in your name.
• If the car has been rebuilt, a rebuilt title can be applied for through your DMV, but only after they have thoroughly inspected the vehicle. The application to test the car must be submitted with a bill of sale, all invoices covering the repair, and photographs taken before, during, and after the repair work is completed. If the DMV is satisfied that the car is roadworthy, a rebuilt title will be issued, and the car can be driven, insured, and resold once again.

How To Ensure The Car You Buy Is In Good Condition

Let’s assume you’ve bought a car from a junkyard that has a salvage title but is being sold as fully repaired and free of defects. How do you know this is indeed the case? Here are some tips:

1. Get all the information you can regarding the extent of the damage before the repair. Ask for photographs of the car before the repair, and obtain the invoices for all the work done and the parts that were replaced.
2. Check with CARFAX or a similar service the history of the car, and if you’re able to speak to the previous owners, check with them that the information you’ve been given regarding the damage is correct.
3. Find out who carried out the repair work and get references and referrals regarding the quality of their work.
4. Once all the work is done, get the car inspected by an expert mechanic who will check every aspect of the car, the quality of the repair, and the ability of the vehicle to pass the necessary test to obtain a rebuilt title.
5. Remember that some salvage cars have suffered very little damage – they may have smoke-affected paintwork from a fire they were not involved in, they may have hail damage which is costly to repair but doesn’t affect the reliability of the car or they may have been stolen and recovered undamaged. All these are well worth considering if you’re looking for a bargain from a salvage yard.

How To Negotiate A Good Price

A junkyard dealer is more likely than a regular second-hand dealer to agree to drop his price because there’s more margin to play with. As a buyer:

• Know your figures beforehand. Find out what a particular model is worth on the second-hand market, have the quotes for probable repairs available, and get a pre-purchase quote from an insurer, as the premiums are likely to be higher than with clean-title cars.
• Don’t appear too keen – let the seller know that you will walk away if the price doesn’t work for you.
• Get an inspection done before you negotiate so that the seller knows you’re serious and you know what condition the car is in.
• Have your finance in place. You need to have cash to make an unconditional offer, as many finance houses don’t finance salvage purchases.

What To Do After You Buy The Car

Once the deal is done and you’ve paid for your bargain junkyard buy, you will have to complete any repairs that are still necessary to put the car in a driveable condition and then put the car through a set of inspections with the DMV.

Once the car has been approved as a rebuild, you can apply for registration and the new title. With the bill of sale as proof of ownership and all the documentation we’ve mentioned, together with the fees charged for the inspections and registration, you’ve done everything required to get the title and have the pleasure of hitting the road with your new set of wheels.

Conclusion

Not every car bought from a junkyard is junk – if you’re prepared to do the research, you will find valuable cars at up to 60% below market value, some with minimal or no damage. If you’re knowledgeable about repairing cars and have the resources, even a damaged salvage car can be rebuilt to provide reliable service at a far lower cost than buying a similar clean title car.

Ensure that your junkyard car is genuine by checking its history, using the VIN, knowing that the title can be converted from salvage to rebuilt and that the repair costs won’t end up making the car more expensive than a clean title car in good condition.

Whitewashing” the title is a common practice in junkyards. It involves bringing a salvage title car in from another state where it has failed the DMV inspections and illegally altering the documents to get a rebuilt title. That’s why it’s vital to check your seller’s reputation before committing to the purchase.

Examining the car before and after the repair has been completed is essential. If you’re not an expert, get one to do that inspection for you – it could save you a lot more than the cost of the exercise.

Resources

https://www.quora.com/Do-junkyards-ever-sell-whole-cars

https://en.wikipedia.org/wiki/Salvage_title

https://en.wikipedia.org/wiki/Salvage_title

https://www.nerdwallet.com/article/loans/auto-loans/should-you-buy-a-salvage-title-car

https://www.reddit.com/r/IAmA/comments/y8uca/iama_salvage_car_flipper_i_buy_writeoff_cars_fix/