by The world’s largest car market, located in the United States, sells about 18 million cars annually. Amid the situation with ‘europlates’ and the opportunity to save money, Ukrainians are increasingly choosing used cars from America.
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U.S. insurance auctions offer damaged cars that have been traded in through the Trade In program, as well as flooded vehicles, and those sold after theft/confiscation due to unpaid loans. But most choose cars after accidents at auctions.
How Cars End Up at U.S. Insurance Auctions
The main reason for many damaged cars on the U.S. secondary market is the high cost of labor in the country. At service stations, mechanics earn from $60 to $150 per hour, and replacing a deployed airbag costs at least $1000. Because of this, insurance companies opt to compensate clients after accidents rather than paying for repair work or disposal.
The system of auto insurance in the USA:
- If repair costs exceed 50% of the car’s value, the insurance company will pay the owner the remaining market value of the damaged vehicle.
- The owner provides the insurer with keys and arranges a new car on credit/lease.
- The damaged car becomes the property of the insurance company, after which it is sold through an auction.
Sometimes, American owners restore their cars themselves, but all repairs are done only in official services using only expensive original parts. The insurer monitors this moment, receives checks upon request, and does not issue a driving permit if there is no confirming documentation. In the United States, it is impossible to conceal an accident as all information is entered into a single database, which can be easily checked by VIN code.
These reasons force car owners after accidents to receive compensation from insurance companies and then purchase new vehicles. Insurers send damaged cars to auction, where they have more chances to sell the car than within the state.
The largest insurance auctions where damaged cars are sold are Copart and IAAI-Insurance. They differ in that Copart auctions allow private sellers, while IAAI-Insurance is distinguished by closed trades and predominantly restored post-accident vehicles. In Ukraine, more attention is paid to lots offered by insurance companies. Such cars are sold at auction in their natural state, with all their issues.
How to Buy a Non-Damaged Used Car in the USA
It is not true that only damaged cars can be delivered from the USA. The American secondary market also offers complete used cars, but purchasing such vehicles is not financially advantageous. For a slightly damaged car, savings can amount to 15-30% compared to prices in Ukraine.
Whole cars from the USA are bought at the Manheim auction, which differs from Copart and IAAI-Insurance by the following parameters:
- sale of fully functional cars, which have been restored after repair or vehicles without mileage;
- only official dealers and insurance company representatives are allowed at the auctions;
- the auction is responsible for the condition of the car admitted to the auctions;
- sometimes, Manheim sells damaged cars with minimal damage. After an expert damage assessment, it may turn out that car repair requires minimal costs (up to $500), and then the insurance company itself fixes faults to sell the vehicle for a higher price.
In any case, buying a car in the USA should be done with a professional approach, competently assessing damages and repair costs.
