How to Buy a Car Directly From an Insurance Company in 2025 (5 Easy Steps to Follow)
How you buy a car directly from an insurance company is by using auto auctions like Copart or IAAI to find salvaged or totaled vehicles. Register, review histories and place bids. Once purchased, secure liability insurance, often starting at $43, to complete the process and save on your next vehicle.
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Jeffrey Manola
Licensed Insurance Agent
Jeffrey Manola is an experienced insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for insurance with the most affordable rates available. Not only does he strive to provide consumers with the best prices for insurance coverage, but he also wants those on the market for insurance to ...
Licensed Insurance Agent
UPDATED: Jan 9, 2025
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Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.
UPDATED: Jan 9, 2025
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident auto insurance decisions. Comparison shopping should be easy. We are not affiliated with any one auto insurance provider and cannot guarantee quotes from any single provider. Our partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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How you buy a car directly from an insurance company is by participating in insurance auto auctions that sell totaled or salvaged title vehicles. Research auction platforms like Copart or IAAI, register, and review vehicle histories to find the best options.
These cars often require a salvage title and liability insurance, which averages $43 monthly. Placing a competitive bid is crucial to securing your chosen vehicle, and arranging safe transportation is the final step. While salvaged cars can save you money upfront, they often come with higher insurance rates and limitations like liability-only coverage.
Following these steps ensures a cost-effective way to purchase and insure vehicles from auctions. If you’re looking to lower your auto insurance premiums, enter your ZIP code into our free quote comparison tool to compare your rates against the top insurers.
- Step #1: Research Auctions – Find platforms selling salvaged or totaled vehicles
- Step #2: Register to Bid – Sign up and complete all registration requirements
- Step #3: Find a Vehicle – Review listings for history, condition, and repair info
- Step #4: Place a Bid – Participate in auctions to secure your chosen vehicle
- Step #5: Get Insurance – Obtain liability coverage and arrange transportation
5 Easy Steps to Buy a Car Directly From an Insurance Company
If you’re looking to purchase a car directly from an insurance company, it’s simpler than you might think. Below are five straightforward steps to guide you through buying a vehicle from insurance auctions and understanding the requirements. Check out the cheapest auto insurance companies for more information.
Step #1: Research Insurance Auto Auctions
Begin by identifying auto auctions that specialize in selling totaled or salvaged vehicles. Platforms like Copart, Auto Auction Mall, or IAAI are popular for offering a wide range of vehicles from insurance companies. These platforms often list cars sold by insurance companies and provide options to buy damaged cars direct from insurance companies.
These auctions often include online and in-person options, making it easier to access inventory from anywhere. Be sure to review the reputation of the auction platform and check customer reviews to avoid scams.
Find more information about the best auto insurance companies that insure cars with salvage and rebuilt titles.
Step #2: Register for an Auction
You must create an account and register on the platform to participate in the auction. Some auctions may require proof of a dealer’s license, but others allow public access, so check the rules beforehand. You must successfully meet the auction’s registration requirements to buy cars from insurance companies. This is essential in learning how to buy cars from insurance companies directly.
You might need to pay a fee during registration, which can vary depending on the platform. Having all necessary documentation ready, such as your ID and payment information, can streamline the registration process.
Read more: Does your car need to be registered to get auto insurance?
Step #3: Find a Suitable Vehicle
Once registered, browse the auction listings to find vehicles that match your requirements and budget. Pay close attention to the car’s history report, repair estimates, and salvage title information. Ensure the platform offers detailed vehicle histories for those wondering how to buy wrecked cars from insurance companies or how to buy damaged cars directly from insurance companies. Auctions are a great resource to find damaged cars for sale by insurance companies.
Use tools like Kelley Blue Book or CARFAX to determine the value of the car and its potential resale or operational worth. Always verify the conditions and terms of sale, as some vehicles may have restrictions or additional fees. For more knowledge, avoid or be aware of auto insurance companies that don’t check accidents reported by CARFAX.
Step #4: Place Your Bid
Participate in the auction by placing bids on your selected vehicle. Researching typical selling prices beforehand is essential to set a reasonable maximum bid and avoid overspending. This step is vital for knowing how to buy cars from insurance effectively.
During the auction, keep track of the bidding process and be prepared for competition from other buyers. Winning the bid will require immediate payment, so ensure your finances are to complete the purchase.
Step #5: Secure Insurance and Transportation
After winning the vehicle, your first step is to obtain the cheapest liability-only auto insurance, as most insurers won’t provide full coverage for salvage cars. This is a key consideration for those who want to buy cars from insurance companies or explore how to buy totaled cars from insurance companies. Contact multiple insurers to compare rates and confirm they cover salvaged titles in your state.
Next, arrange transportation for your car, as most auction sites won’t allow you to drive the vehicle off the lot. Hiring a professional transport service ensures the car is safely delivered to your desired location.
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Understanding Auto Insurance Options for Salvage Vehicles
Insuring a salvage vehicle is not only challenging but also risky. These cars often have compromised safety and are difficult to cover with comprehensive or collision insurance, making loans nearly impossible to secure.Dani Best Licensed Insurance Producer
Can I keep my car if the insurance company totals it? Possibly, if you wanted to repair it yourself. They deduct the amount they estimate they’d receive from selling it at auction. Though it would save money in the long run, getting comprehensive collision coverage to cover your vehicle will make it challenging.
Although guidelines vary by state, liability coverage is mandatory. The table below shows the average liability auto insurance rates by state in the U.S.
Average Monthly Liability Auto Insurance Rates by State
| State | Average Monthly Rate |
|---|---|
| Alabama | $52 |
| Alaska | $47 |
| Arizona | $49 |
| Arkansas | $51 |
| California | $58 |
| Colorado | $57 |
| Connecticut | $60 |
| Delaware | $62 |
| Florida | $68 |
| Georgia | $63 |
| Hawaii | $44 |
| Idaho | $42 |
| Illinois | $48 |
| Indiana | $46 |
| Iowa | $39 |
| Kansas | $45 |
| Kentucky | $54 |
| Louisiana | $71 |
| Maine | $38 |
| Maryland | $59 |
| Massachusetts | $55 |
| Michigan | $72 |
| Minnesota | $50 |
| Mississippi | $53 |
| Missouri | $52 |
| Montana | $44 |
| Nebraska | $43 |
| Nevada | $65 |
| New Hampshire | $41 |
| New Jersey | $67 |
| New Mexico | $48 |
| New York | $64 |
| North Carolina | $40 |
| North Dakota | $42 |
| Ohio | $39 |
| Oklahoma | $50 |
| Oregon | $47 |
| Pennsylvania | $56 |
| Rhode Island | $63 |
| South Carolina | $51 |
| South Dakota | $43 |
| Tennessee | $48 |
| Texas | $61 |
| Utah | $49 |
| Vermont | $38 |
| Virginia | $45 |
| Washington | $52 |
| West Virginia | $55 |
| Wisconsin | $44 |
| Wyoming | $41 |
The insurance that would typically cover your vehicle includes comprehensive and collision. But if insurers refuse to sell that to you out of concern for the car’s integrity, you will likely not get a loan to buy it.
This is mainly because lenders usually require full car coverage while you’re paying back the loan to protect your assets. You probably won’t get the loan if you can’t get full coverage auto insurance.
Criteria for Classifying Vehicles as Salvage
There is a difference between salvaged and totaled vehicles. You may hear them interchangeably, but they’re not quite the same. Typically, salvaged vehicles were once considered totaled in an accident, but not all totaled vehicles are salvaged. Salvaged cars are usually those which have been repaired after significant damage. This damage could come from various things, such as:
- Collision with another vehicle or object
- Flood damage
- Fire damage
- Heavy vandalism
- Hail damage
- Recovered stolen vehicle
The table below shows the difference between clean, salvage, and rebuilt titles.
Details of Vehicle Titles by Title Type
| Title Type | Color of Title | Issuing Factors | Pros | Cons |
|---|---|---|---|---|
| Clean title | Green | Issued for new or used vehicles with little to no damage | No damage or repairs to deal with | Most expensive upfront cost |
| Salvage title | Blue | Issued for vehicles whose damages exceed the value of the vehicle | Usually very cheap to purchase | No insurance available, can't be driven legally, and repairs can be costly |
| Rebuilt title | Orange | Issued for vehicles that were salvaged but have been repaired and passed an inspection | Cheaper than a new or used car to purchase | Can be driven legally but can be hard to find more than liability insurance |
Once a vehicle is totaled out, it might be rebuilt or repaired to an operable state. Once it’s considered safe to operate, it can be re-titled as a salvage car. This video from Donut Media further explains salvage titles.
The value of the vehicle changes, too. How insurance companies determine a vehicle’s value plays a significant role, and the industry typically estimates that salvage vehicles have deducted 20 to 40 percent of their Kelley Blue Book value.
Uncovering the Risks of Title Washing in Salvaged Vehicles
The salvage industry has led to an illegal practice called “title washing.” CarFax describes title washing as fraudulently altering a title’s status to erase the vehicle’s history. This poses risks for those seeking to buy damaged cars directly from insurance companies or purchase cars from an insurance company for sale.
What do auto insurance companies do with totaled cars? This allows previously totaled cars to be presented with a clean title, misleading potential buyers. This is particularly concerning because totaled vehicles might be structurally compromised due to their history. Even if rebuilt after a crash, certain parts may not retain their original strength or integrity, increasing safety risks.
The National Motor Vehicle Title Information System helps combat title washing by tracking key vehicle data. These include the title’s current state and last update date, the vehicle’s brand history, the odometer reading, the totaled loss history, and its salvage status. This system helps prevent the fraudulent alteration of up to 57,000 vehicle titles annually, according to GovInfo.
Whether buying salvage cars in the UK or the U.S., auto insurance full coverage or other types is necessary to protect your investment and ensure compliance with local laws.
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Your Path to Smarter Car Purchases
Buying a car directly from an insurance company offers a budget-friendly alternative, especially for those open to salvaged or totaled vehicles. Understanding the potential impact on your auto insurance premium, knowing how to buy vehicles from insurance companies, and being cautious about title washing are key for a successful purchase. Auctions remain a primary avenue for finding damaged cars sold by insurance companies.
For those wondering, “Where do insurance companies sell damaged cars?” auctions remain a primary avenue. While challenges like limited coverage and transportation logistics exist, careful planning makes the process worthwhile. Start comparing insurance rates today to protect your investment and maximize your savings. Explore your auto insurance options by entering your ZIP code into our free comparison tool today.
Frequently Asked Questions
Can I buy a car directly from an insurance company?
Yes, it is possible to purchase a car directly from an insurance company. When insurance companies declare a vehicle as a total loss due to damage or theft, they often take ownership of the vehicle. These cars are then sold through various channels, including auctions, online platforms, or directly from the insurance company.
Are there any downsides to buying a car directly from an insurance company?
Cars bought from insurance companies typically lack warranties and test drives, so how much car insurance you need is a key consideration. Buyers should inspect vehicles thoroughly or hire a professional to uncover hidden issues.
What are the advantages of buying a car from an insurance company?
Cars sold by insurance companies are often priced below market value, with detailed accident histories and repair records provided to help buyers make informed decisions. These companies also offer a wide selection of vehicles, from slightly damaged to completely totaled, giving buyers diverse options.
To find out if you can get cheaper auto insurance rates, enter your ZIP code into our free quote tool to instantly compare rates from various companies near you.
How can I buy a car directly from an insurance company?
Cars can be purchased directly from insurance companies through public or online auctions, which is a common method for buying cars from insurance companies, where buyers can bid on listed vehicles. Alternatively, buyers can use online platforms partnered with insurance companies or contact the insurance company’s claims or salvage department to inquire about available cars for sale.
Are any risks involved in buying a car directly from an insurance company?
Buying a car directly from an insurance company has risks, including undisclosed issues, limited recourse, and salvage or rebuilt titles that may lower resale value or restrict insurance options. Additionally, the inventory varies in make, model, and condition, making it harder to compare auto insurance rates by vehicle make and model or to find specific vehicles.
Can I buy my car back from insurance?
Yes, it is possible. If your car is totaled, the insurance company may allow you to repurchase it at a salvage value. This is often discussed when looking into insurance companies selling cars or exploring how to buy cars from insurance companies.
Are there any downsides to buying a car directly from an insurance company?
Potential downsides include difficulty obtaining comprehensive insurance and higher repair costs. These factors are essential to consider if you plan to buy a car from insurance or research cars from insurance directly.
What is the difference between a salvage title and a rebuilt title?
A salvage title is issued for vehicles deemed a total loss by an insurance company, often assessed using a totaled car value calculator. A rebuilt title is granted after repairs and inspection, certifying it as roadworthy, but such cars usually face insurance and resale limitations.
Are salvage title vehicles safe to drive?
While some salvage title vehicles can be repaired to a roadworthy state, their safety depends on the quality of repairs and the extent of the original damage. Always request a thorough inspection from a trusted mechanic before purchasing a salvage title vehicle to ensure its structural integrity and operational safety.
Can I finance a car with a salvage or rebuilt title?
Financing salvage or rebuilt title vehicles can be challenging, as many lenders are hesitant to approve loans for these cars due to their lower resale value and higher insurance risks. If financing is available, expect higher interest rates and stricter terms. It’s often better to pay in cash for these vehicles.
Free Auto Insurance Comparison
Enter your ZIP code below to view companies that have cheap auto insurance rates.
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Jeffrey Manola
Licensed Insurance Agent
Jeffrey Manola is an experienced insurance agent who founded TopQuoteLifeInsurance.com and NoMedicalExamQuotes.com. His mission when creating these sites was to provide online consumers searching for insurance with the most affordable rates available. Not only does he strive to provide consumers with the best prices for insurance coverage, but he also wants those on the market for insurance to ...
Licensed Insurance Agent
Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.