If you are about to attend an auto auction for the first time, then you may be wondering why you should buy auto insurance for auction cars. Depending on why you are purchasing the vehicle and what type of car it is can play a large role in handling the insurance situation. Here is a quick overview of many of the most common situations involving auto insurance for auction cars and what to expect.
Buying Auctioned Cars for Your Personal Use
When purchasing cars at auction solely for personal use auto insurance is important for several reasons. The most obvious reason is that you needed in order to legally drive the vehicle on a regular basis. One thing that most people think about is the rules specific to each auction. Some auction houses will require you to have proof of insurance before you drive the vehicle off of their lot, while some will not. In general, auto auctions which will also sign over the title and registration to immediately will also be the ones which require you to have insurance right away. If you are attending a salvage vehicle auction or an impound auction then you may be able to drive it off the lot without insurance – although it is still not recommended.
Buying Auctioned Cars With a Salvage Title
In terms of auto insurance, think and you little more complicated when you purchase a car with a salvage title or a salvage vehicle. The difference is that a car with a salvage title has already been repaired and past any state required safety and emissions tests. A salvage vehicle has not yet undergone repairs and does not currently have a title. If you have purchased a car with a salvage title then it is only a matter of finding an insurance company to cover your vehicle. While some insurance companies refuse to cover these vehicles, many of them will. One thing to keep in mind is that since the vehicle was previously salvaged, you will likely only get a 50% to 75% of its value in the event it is totaled. This is because insurance companies do not assign previously salvaged vehicles the same value as a regular vehicle. If you purchase a salvage vehicle, then you will have to have it towed off of the lot and will not need to ensure it until it passes the safety and emissions tests and is given a title.
Why You Should Buy Auto Insurance for Auctioned Cars – In General
Aside from needing auto insurance to legally drive, there are some other general reasons that you should purchase it as soon as possible. The most important reason is that if, for some reason, there is an issue with your car you will likely discover it within the first few months. Unfortunately, this could sometimes be because you get into an accident. If this is the case, then having insurance is more important than ever, especially if you are found liable for the damages.
Another reason that you may need to buy auto insurance for auctioned cars that you purchase is because you get a loan. Just like purchasing a car from a dealership, whenever you get a loan from a bank or credit union you must ensure that property. This helps lending institutions guarantee that they will get the loan amount back if an accident occurs. One thing to keep in mind is that if you do get a loan from a bank, they may restrict the type of car that you can get. For example, even though you can get insurance for a vehicle that has a salvage title, it will rarely be comprehensive coverage. As a result, the lending institution is not fully protected and will not give you the loan.
There are a lot of reasons why you should buy auto insurance for auctioned cars, however it all comes down to the type of vehicle you purchase and how you plan on using it.