A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 18, 2021

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An insurance auto auction is where consumers and businesses can purchase vehicles for a very low price. According to Insurance Auto Auction, this happens in cases where insurance companies have deemed them unsalvageable. This can include stolen and damaged vehicles, or cars involved in collisions. With services offered such as online or in-person auctions, it makes it easy to obtain vehicles at salvage price, if you’re not sure you want to go through a dealer for something that’s only going to be a project car. Auctions can be a great way to not tie up all of your finances.

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Most auto insurance companies base their decisions to approve or deny an insurance repair claim according to the amount of damage inflicted on the automobile during an accident. If the damage is too great or the cost of repairs is more than the value of the vehicle, your claim is denied and the car will be listed as a total loss.

If this occurs, the vehicle is towed to a facility and placed in an insurance auction database where it is sold to the highest bidder. Insurance auto auctions help you find vehicles that you can purchase, fix, and resell.

You can also remove the non-damaged parts and sell them separately. Either way, the amount you pay for the vehicle will be so low that you will definitely see a profit.

What is the insurance auto auction bidding process?

There are usually three ways to participate in an insurance auto auction. They are designed to expedite the process and keep things moving smoothly. Before you decide on your method, it is important that you understand the difference between them.

Live – All across the nation, there are licensed insurance auto auction facilities that conduct daily auctions. Complete your research and find the place closest to you. You can even inspect the vehicles prior to the auction to ensure the inventory meets your standards. The preview dates are provided by the facilitator. Once you arrive, bid on the vehicle and if you submit the highest bid, you win the car.

Online – Online car auctions are great for people who do not have the time to visit an auction in person. For online auto auctions, you will be required to log onto the site you choose and set-up an account. From there, you can review the types of vehicles on record, numbers of vehicles, times and dates of the auction and place your bid.

Online insurance auto auction bidding requires a valid credit card or checking account and you must be aware of the status of the vehicles and verify that they are still available. If the vehicle you are interested in has a time next to it, it is available. If the status reads closed, it is too late. Having auctions online is a great way to provide an option for those who otherwise wouldn’t be able to get to one in person.

Proxy – A proxy bidder represents you and makes bids according to your specifications. They are required to report to the facility, show their identification, and confirm they have permission to bid on your behalf. They follow the exact same procedures as if they were personally responsible, but they must confirm the final bid with you before it is approved.

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What are some insurance auto auction locations?

One of the largest vendors, Insurance Auto Auctions, has locations throughout the United States. Simply log onto the website and search for your state. Some states have more than one location, like California, Texas, North Carolina, and Louisiana. There are more locations in the eastern region of the country. This shows how popular auto insurance auctions have become over the years and word is spreading quickly. Being able to find project cars, motorcycles, and recreational vehicles at affordable rates does have a certain appeal to it. So it’s no surprise that the salvage market is doing so well.

Searching for a local insurance auto auction is not as challenging as you might think, but the cars go fast. If you are interested in participating, you must register, either online or in-person as soon as possible. Remember, there will be a large number of people bidding against you so it is imperative that you budget your money accordingly to ensure you can compete with the masses. This is why online auctions have also become fairly popular.

What are some other types of vehicles that are available at insurance auto auctions?

In addition to automobiles, insurance auto auctions also provide you with the opportunity to bid on other types of salvage vehicles including motorcycles, recreational vehicles, commercial vehicles, and construction equipment. Heavy equipment can be expensive, so an auction provides the cheapest option. This is why you will see large corporations bidding during the auctions.

Rather than purchasing new or used equipment, large companies and corporations can save thousands of dollars by working with insurance auto auctions.

Most times, they pre-arrange their orders if there are fleets involved. For example, if a large company is looking for ten to twenty Bobcats or backhoes, they will contact the auction facility to arrange a private inspection, on-site.

This is also true for salvage companies that sell parts only. These types of companies will be your biggest competition. It may be easier to find an insurance auto auction that frequently offers automobiles, rather than a variety of vehicles to help even the odds.

Enter your ZIP code into the FREE tool you can find here to receive the best car insurance rates today via online auto insurance quotes! As with online auctions, getting an online quote has become more popular since it’s fast and easy to do.