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Auto Insurance Auctions - Benefits and Drawbacks of an Auto Insurance Auction

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Many people obtain their new vehicle through the use of an auto insurance auction. What exactly is an auto insurance auction? These auctions are where cars are auctioned off and the highest bidder gets to walk away with a new pre-owned car. However, the use of an auto insurance auction has many benefits, but risks as well that the consumer must be aware of.

First, the biggest benefit of buying a car from an auction is the fact that you will get the car for much less than if you were to visit a car lot. However, with this huge benefit comes the risks. For starters, you rarely get to test drive the vehicles, thus you must know what you are looking for in terms of driving preference before going to one of these auctions. Secondly, you always have the potential to get a car that is less than stellar when it comes to the operating condition. Most auctions do allow the interested buyers to lift the hood and check around, however, most problems that a person may encounter are not easily seen by the naked eye.

This is where an insurance auto auction is a bit different and will be where the best deals can be found simply because the cars have been wrecked by their owners. The damage could be minor or it could be major, but it is basically the lenders attempt to make back some of their money that they lost when the previous owner got into the wreck. Since these cars are wrecked, it helps to know a little about cars so that you can ensure that you are getting a car that can be fixed. If the frame on a vehicle is bent, it will never drive the same, which is something to watch out for. However, these auctions are used closed to the public and open to those that specialize in scrap cars for their metal or to refinish. It is only on rare occasions that a consumer finds a car that they can drive in a few months after a little work. However, for those car enthusiasts, this is a great way to get a hold of parts for a pet project without having to pay a price that is dramatically higher.

Usually these auto insurance auctions take place every few months or at least once a year, as insurance companies try to find a way to get rid of the vehicles while still putting it to some use.

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