Shopping for a Wreck
By Mike Hillyer | Related entries in Automotive, Spend LessYou may recall that in a previous post I suggested wrecked vehicle auctions as a potential source of savings when procuring a new (to you) vehicle. Well, I gave that advice from experience, and I am in the process of gaining more experience.
I currently own a 1997 Ford Taurus, which I purchased at a normal (non-wrecked) vehicle auction. We paid $10,000 for it and at the time it had a book value of $14,000. It is now worth about $5,000 and I would like to upgrade to a minivan before it loses too much more value.
The reason for going to a minivan is twofold:
1) When we go on trips with two adults and two kids there is barely enough room for all the supporting materials such as suitcases, sleeping bags, etc. The Taurus has a nice big trunk but there is still only so much room.
2) We won’t have two kids forever, we expect one or two more to show up eventually. I’d rather prepare for a third kid while the resale on my sedan is higher.
So, time to start shopping. My parents recently got into a 2003 Dodge Caravan for about $7,000 after repairs and inspections, and I’m aiming for about the same.
I head down to the wreckers to check things out…
Our first candidate is not looking so hot:
Both airbags are deployed and the dash is shifted. This one is a no-no. Airbags are not cheap to replace, and if your dash is shifted you must rip it apart to fix things. This will probably end up a parts car at an auto wrecker.
This truck is a rollover and another fine example of what you do not want to buy:
Rollover vehicles can be a real pain, and while not impossible to fix, the are still a piece of work and require a lot of replacement body panels.
Now here is a beauty:
A 2003 Ford Expedition, Eddie Bauer Edition with a 5.4 litre V8 engine. Perfect for towing that huge camper, or maybe the 14′ aluminum boat also for sale at the auction. The damage looks bad but it is mostly superficial, new front passenger wheel assembly, new front fender and door, new rear body panel and window. The only real kicker is the side airbags deployed and will probably be a pain to replace (take it to the dealer for that).
The engine looks fine and there is no frame damage, so this is mainly a cosmetic job with the exception of the wheel and airbags. Of course, I in no way can afford to drive such a beast, the gas prices would be huge and the insurance would match. While I could have four more children, maybe five with this monster, they would cost a ton as well. So, No Expedition for me.
The book value is $30,000 and it looks like it needs ~$5000-$8000 in work, so I throw a $5000 Hail-Mary bid on it. If it goes that low I can get it on the road for $10,000-$12,000, sell it for $25,000 to $30,000 and pocket the difference.
This is what I was looking for:
2001 Ford Windstar, book value $12,000. The front end was hit from the side so the front bumper supports of the frame were bent:
Frame damage adds to the cost, so we have to factor that into the bid.
So, I got the VIN, took it to the dealer, and discovered that this is a 2001, Sport edition. It has nice alloy wheels, keyless entry, blah blah blah. Evaluating the damage, we need a new bumper, new grill, new hood, new headlights, maybe a new radiator, A/C Compressor, and A/C cooler, but I can’t be sure till it can be closely inspected.
Thanks to a contact of my father, the frame can be straightened professionally for $600 (major savings). The additional parts bring the repair costs to around $3200, and I tack on $500 for a margin of error.
Now I don’t really want to spend more than half the book value on a wrecker auction vehicle, so I will set my bid in the $2000 - $2200 area.
The only catch is while it is in the wrecker yard, it is not on this bidding go-round. Sometimes vehicles have to wait for a full write-off before they can be auctioned, so I have to wait another week and see if it in part of the next auction. Bidding is silent, so you have to play a guessing game of how much you think the other guy will bid.
At any rate, I’ll keep you posted.
Note: Bidding on wrecked vehicles requires a certain amount of know-how that even I do not posses, thus I depend on more experienced people (in my family in my case) to help me. While you can even save money by purchasing a wrecked vehicle and having it fixed by a professional, you should not get into this alone. Bring a professional along, have them estimate the repair costs, and bid accordingly. Do your research before you bid, and also look at getting the VIN and having the DMV run a search on it.
This entry was posted on Thursday, April 7th, 2005 and is filed under Automotive, Spend Less. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
April 7th, 2005 at 12:47 pm
I have never personally tried to register/pass inspection/pass emissions/etc a car with a wrecked title but advice from friends who have (they restore cars, some of which started as wrecks) and they say that there are a lot of DMV/MVA hurdles you’ll have to overcome. They say the hardest part isn’t the restoration but the red tape you need to go through in order to get the car registered. I hope I’m not repeating information you already know.
April 7th, 2005 at 12:53 pm
Oh I know, like I said my family has done this a few times. That being said I’m sure somebody didn’t know, so thanks for the tip!
April 7th, 2005 at 2:13 pm
Oh for the love of pete please tell me you get the vehicle’s frame carefully examined and if it is broken, walk AWAY from the vehicle. I owned a used car that a mechanic certified as a good purchase. It was until I got in a very tiny fender-bender that a body-shop professional informed me that the frame had been broken in a previous accident and frames are very difficult to fix - usually they are not roadsafe afterwards.
Buying wrecked vehicles may be a good way to save money, but there’s a high risk associated with it that most average car-owners are not qualified to judge. You could compare it to purchasing new venture software stocks, if you like. Great return but the downside could be incredibly bad.
April 7th, 2005 at 2:22 pm
Mike did recommend to bring a professional along, which is sound advice. Never make a decision like this on your own.
April 7th, 2005 at 2:22 pm
Sheesh, I should have written ‘Kids, don’t try this at home’ in the note at the end of the post.
I said I got a quote on frame fixing, I didn’t get it over the phone, I had the guy go down and look at the vehicle. See the ‘Bring a professional along’ part in the last paragraph?
April 10th, 2005 at 10:36 am
Are you concerned about the vehicle having a salvage title when you go to resell it? I’m not at all familiar with minivans, but when I was looking for a new (used) sporty car a few months ago, I saw an ad for a 2002 Miata for $10K, with a salvage title. This might mean it underwent extensive professional repairs, or it could have been fished out of the river, or it might simply have been a stolen car that was a write-off. At any rate, I didn’t want to deal with a salvage-titled car, since it seemed to take a huge chunk away from the value of the car, and could mean unknown mechanical problems down the road.
April 10th, 2005 at 1:01 pm
I personally am not, because by the time I resell it the vehicle will be old enough that it would not likely affect the already low resale. In Alberta a vehicle that has been submerged can never be re-registered actually, but it may vary by region.
That being said, others may have a concern with this, so thanks for pointing it out!
June 10th, 2005 at 9:57 pm
[...] ughly by the number of people (if I don’t pay for another outright), and I tip generously. I do not buy totaled cars, but cars with easily repairable damage, saving over 50% [...]
July 6th, 2005 at 10:30 am
Mike, do you have any clue how dangerous this advice is?
When I saw that someone posted a link to this from a car forum that I frequent, I was shocked by this advice which prompted me to post my opinion about this and frugality in general, which eventually led to your response and what you refer to as a great debate but what I call ignorance.
This is the blind leading the deaf.
Buying a wrecked car is dangerous for you, your passengers and the public who you share the roads with. No matter for good you fix it, a totalled car is never the same and can never be. Luckily you will have only alignment issues because of frame damage. At worst, you will be driving a rolling death trap.
Can’t afford to buy a new car? Buy an used one then. Can’t afford that either? Then walk or take the bus.
July 6th, 2005 at 11:09 am
Actually this post is more about documenting experience than giving advice.
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