If you purchase a car at auction, you may think that you need special car insurance. While there is no specific auction car insurance, you may need to purchase specialty car insurance–such as salvage insurance–depending on the type of vehicle you purchase.
You can do an online comparison of car insurance rates right now with only your zip code!
In the past, if you went to a car auction, you weren’t sure what you might be getting. Often, car auctions were sold cars that were seized by the government or police, damaged by flooding, repossessed vehicles, and so on. You weren’t allowed to look at the vehicle before hand or get a mechanic’s opinion.
While these types of auctions still exist today, there are other types of auctions as well. Car dealerships will conduct auctions of vehicles on their lot to reduce stock. What’s more, there are also classic car and fine car auctions for people with a lot of money to spend on their cars. Classic car insurance is even available for these purchases.
You also can’t exclude sites like eBay from the car auction list. It is a fact that eBay has become a go-to source for people looking to find a good deal on their next vehicle. In fact, not only are individuals using eBay to sell their used cars, but car dealerships also use eBay regularly in an effort to sell their vehicles to the highest bidder.
When do you need specialty car insurance such as salvage insurance?
When you purchase a vehicle that has had serious damage due to a car accident, flood, or fire, then you will need to purchase salvage insurance.
There are many insurance companies that won’t even write a salvage insurance policy.
It is in your best interest to check some of your local insurance companies to see if you can insure this type of vehicle before you purchase one.
If you purchased the vehicle for parts, for example, then you won’t need to purchase auction car insurance at all. As long as you don’t drive or register the vehicle, you will not need to purchase auto insurance.
How do I ensure I can purchase car insurance on my auction vehicle?
Every vehicle in the country has a VIN (Vehicle Identification Number). This VIN is unique to each vehicle and when a vehicle is manufactured, it is assigned a VIN that is placed in a national database. Here are some tips regarding your purchase and that VIN number:
- Each time a vehicle is in an accident, the insurance company, the police department and possibly the company that tows the vehicle all write down that VIN number in their paperwork. This information is also placed in a national database associated with that VIN.
- No matter what type of auction you are buying a vehicle from, you are, by law, allowed to ask for the VIN. The car dealer or auctioneer is under no obligation to provide you with any other information, but you can typically find out what you need to know from that simple number.
- Typically, you are going to have to pay for something like a CARFAX report. CARFAX is a company that can provide you with information on any VIN that you type into the system. Some of the minimal information is free, but you will have to pay for a full report.
The benefit of using a service like CARFAX is that it lists every reported accident and/or claim made on a vehicle.
While you could probably find out this information for free, most auctions are time sensitive and a CARFAX report, or something similar, can provide you with the information that you need instantly. This will also let you know what an insurance company will see if you try to purchase insurance using the VIN.
CARFAX is not the only company that provides this service, but they are considered the premier service by many car dealers who use this same service to determine whether a car is worth buying.
Many insurance companies will not provide coverage for vehicles that have been declared totaled by an insurance company.
In addition, a vehicle that has been in a fire or a flood may be uninsurable. The bottom line is that it depends on the insurance company and the extend of the damage as to whether you are going to have difficulty buying a car insurance policy.
Do I need specialty insurance when I purchase a classic car at an auction?
Classic cars are actually a different sort of animal in the insurance world.
In order for an insurance company to view it as a classic car, it must be certified as such. You can purchase a totaled classic car and get insurance for it as long as it has classic car certification. Insurance companies recognize that a classic car can still have high value even if it is totaled.
Consider these points when buying a classic car at auction:
- If you purchase a classic car at an out of state auction, you will need to consider your shipping needs. Most car shipping companies cover your vehicle if it is damaged while being shipped, but this is something you don’t want to leave to chance. Check with the shipping company and your own insurance company to make sure that you are completely covered.
- Any registered vehicle is required to carry auto insurance and your classic car is no exception. If you purchase a classic car with the intention of not driving it, you should check your state’s laws regarding storing a registered vehicle. Some states do make exceptions for classic cars, but you need to verify this before you forgo necessary insurance.
- You may want to consider coverage regardless because a classic car has such a high dollar value. If someone were to steal your vehicle, could you take the financial loss in stride? If not, make sure you have the proper coverage on your vehicle. In this case, you would need comprehensive coverage to cover any loss due to theft.
- Unlike modern vehicles, classic cars don’t necessarily have a VIN. There are, however, other ways of identifying what has happened to classic cars in the past due to unique serial numbers and parts put into specific vehicles. This will help the insurance company give you an accurate quote for your vehicle.
Understanding companies’ insurance methods is just the first step in purchasing your auto insurance. You want to ensure that you get the best rate as well. Using a comparison tool to compare the rates between car insurance companies is the fastest and easiest way to accomplish this.
You can compare car insurance rates right now with just your zip code! Try it today!