Should You Buy A Police/Salvage Auction Car?

by Michael Satterfield 05/19/2022

YouTubers have made buying cars at auction seem like a simple process, just bid online, have a man with a forklift drop it off on your trailer, do a few quick fixes and enjoy your new car at a massive discount. We have all seen it, for just a fraction of the price you can buy your dream McLaren, Ferrari, or Aston Martin, you just might need to deal with whatever totaled the car out... which shouldn't be a bid deal at all... like a cracked carbon-fiber tub or an engine full of saltwater. But the dream of bargain-basement exotics has fueled an entire genre of automotive content. 

Fanning the flames auction companies have been pouring advertising dollars into supporting many of these content creators who make auction shopping look so simple, but many of our favorite flippers fail to disclose what the total costs are or if they are sponsored by or have a special deal with the auction companies. One of the auction houses had reached out to me about doing a video for our YouTube channel, they would wave a bunch of the fees, but we couldn't come to an agreement on the content. 

But I had always wondered if you really could get a good deal as an average consumer, so I decided to find out what the process is like for an average automotive enthusiast. I didn't jump right into buying crashed exotic supercars, instead, I bid on and won a 2011 Ford Fiesta for $2,300, plus fees.

The Fees: 

All auction houses have fees, but the most popular auction houses, Copart and IAA, have a lot of fees, and the cheaper the car the higher the fee. For example, a $500 car will cost you a bidding fee of 37% at Copart while a $15,000 car has a bidding fee of 7%. Both have a similar tiered fee schedule based on the value of the car, but that is only the start. Copart charges a $79 "Gate Fee" for all purchases. Bidding Online? That fee is $29-$129 depending on the selling price. These are on top of the standard bidding fee. 

Full list of Copart Fees

IAA has mirrored this pricing structure almost exactly, they have a $79 "vehicle handling fee" for each transaction. Their online bidding fee is $29-$129 dollars. You do get a break if you are buying more than 25 cars a month, but your average consumer won't be doing that. 

Full list of Insurance Auto Auction Fees

Most other auction houses that are selling police impounds or municipalities fleets charge a flat ten-percent fee, plus two to three percent for online payment processing, which you can save by showing up in person and paying cash. A good example is Purple Wave Auctions, which offers municipal auctions throughout the midwest, everything from impounds to former police cruisers. Being the midwest they also have some great deals on farm equipment. I won my auction online and instead of driving to the auction house offices in Dallas, I paid the additional three percent fee since the car was at a different location.

So based on my auction price here is what the total fee price would look like had I bought the car from each auction house:

Oh and before I forget, Copart and IAA both also have membership fees, and only paid accounts can bid on vehicles, Copart charges $59 annually for a basic membership, and premier membership is $199. IAA charges $200 annually for all buyers, so you can add those to your total. Municipal auctions generally only require a credit card to be on file, however, bids over a certain threshold may require additional credit checks or proof of funds. 

Pre-Auction Inspection:

Despite what many YouTubers show, you cannot simply show up at the auction yard strap on a yellow vest and hard hat, and walk around randomly checking out cars. That privilege is reserved for those who are partners with the auction houses and have been given special permission to film. How the process worked at our local Copart was as follows. Call and make a reservation to see a specific car, and be escorted to that car by an employee, you could not look at other cars unless you had requested the pre-auction inspection before arriving at the location. 

IAA also has restrictions on pre-auction inspections with pre-view dates and times specified by each local facility. IAA and Copart only allow members to inspect cars pre-auction so will have to sign up for the annual membership before you can even look at a car you are considering bidding on. 

For police impound and municipal auctions, the cars are generally being held at an individual towing company yard and can be inspected by appointment by contacting the tow yard directly. Many auction houses will also list the address, phone number, and email address of the storage facility that is holding the vehicle for bidders to contact directly. 

I opted to roll the dice and didn't go and see the car, it was low enough miles based on the CarFax and looked to be in decent shape. But the car was missing keys and was marked as "non-running." So just beware you never know what you are going to get. 

Taking Delivery:

Once you have paid your auction fees it is time to pick up your new vehicle. Copart and IAA will load vehicles with a forklift but many smaller tow yards just make an appointment and have you pick it up. However, with cars that are at towing companies, you can simply hire the towing company to deliver the car to your house, it's like Carvana but with a car that might have been used in a felony. I opted to have the tow company deliver the car, for $120 bucks it was cheaper than renting a trailer and spending the hours picking up the car and returning the trailer. 

Now sitting in the driveway is a non-running, Ford with no keys, and I have a folder full of paperwork that says I am the legal owner, but I don't have a title yet. Time to figure out how to get this thing titled. 

The Paperwork:

This process will depend on what state you live in, but in Texas, the paperwork is pretty straightforward and simple. After filling out the transfer of title paperwork online and printing the forms, it was as simple as driving down to the local tax office to submit the forms and show proof that the vehicle was purchased after being abandoned at impound. A small fee and some taxes were paid, and in two weeks a title showed up in the mail. 

The Fiesta Project:

So a Fiesta might not be high on anyone's list of project cars, but seeing as I have always had a bit of a soft spot for small cars and a long history with Ford, it was a natural choice. Similar cars in the current crazy used car market are selling for $5,000-$10,000 with similar miles, and while I did have to spend $300 on new keys and remotes, and a bit of money on repairs to get it up and running. All said and done I am in the car for just over $3,800, making it still a very good deal. 

With our new headquarters and studio set to open this summer, I am going to use the little car to rack up backroad miles to and from the office. I already have plans for some fun stuff for it as well, wheels, wing, and some other little upgrades have already been ordered.