How to Buy Cars for an Auto Salvage Business
Making money from an auto salvage business requires a wide inventory to peruse when customers arrive seeking parts for a certain make and model of automobile. A large enough inventory can make you the "go-to" guy in your area for parts. However, purchasing vehicles for a scrap yard is typically a long-term investment. It could be years before you sell all the parts from a car you purchase, so it is essential that you spend as little as possible when you buy cars. An ample list of suppliers can ensure a variety of autos at prices you can afford.
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Instructions
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Arrange for a line of credit at your bank or credit union. Purchasing junk cars typically requires that you be able to pay cash. A line of credit gives you access to money to fund your purchases.
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Locate sources for salvage automobiles. Call local towing companies, insurance companies, police departments and classified advertisements to ask about junk car availability. Search online auction sites such as eBay and Craigslist to find vehicles for sale.
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Check with your state's motor vehicle division to ask about its salvage title regulations. States typically require that a salvage yard receive the title when purchasing a vehicle to prevent it from buying a stolen car.
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Negotiate bulk purchases whenever possible. Ask towing companies and police departments about purchasing vehicles by the lot at a discount. Point out that it is less expensive to give you a discount than to go to the expense of having a sale.
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Advertise in your local paper and websites that you purchase old cars. Specify that the cars do not have to be in running order. Offering to pick the cars up will allow you to pay less, if you can tow or trailer the vehicles.
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Offer a lower price than the seller wants, then negotiate an acceptable price for both of you. Ask the seller to make a bill of sale and acquire a new title from your state listing you as the owner of the vehicle.
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Tips & Warnings
If the vehicle does not have a salvage title at the time of purchase, file for a salvage title if you are going to remove its parts to sell to customers or metal recyclers.
