The thought of driving something that has been affectively and insurance write off can scare some and encourage others. The potential of owning a newer model with less miles, just for a bit of work can be enticing and engaging, but the risks of getting everything right isn’t for everyone.
Clearly the first piece of advice should not need to be given. Buying the base project at the right price, so that when labour and components are bought, there is positive money in the investment. It seems a pretty obvious statement, but the inexperienced often do not know the real costs of obtaining spares, or labour and neglect other miscellaneous costs such as petrol to pick up components, phone calls, MOT tests even transporting it home from where it was bought.
So get a piece of paper out and add these base costs up first before any attempt to buy is made. I read in a major auto magazine this month, that you should only buy a salvage project from a dealer and not privately. My experience is something different, as by the time they have added their margin, that is all profit gone.
The real reality is many models never sell at auction or trade events cheap enough to be put back on the road, especially many BMW’s and Mercedes. The reason for this, is that the spares within are worth more than the total value. With engines selling for thousands, then bolt on interiors, gearboxes and many more components, it is no wonder that dismantlers will pay big money to fill their shelves with quality stock.
This doesn’t mean, there are no options out there. It just means, you have to look harder and maybe for some time, until the right investment comes along. This is another reason why I can’t see how a trade dealer will sell a project, that will be cost effective to repair. if you want to buy cheap enough, you need to go to the same auctions as the trade and do your homework as if you were in the business. This might sound very negative, but every year thousands buy a salvage project and end up with something they could have bought cheaper just by visiting their local normal auction house.
Those who do make money, do their homework and either have direct contact with cheaper spares and labour and have the relevant tools already.
The first example I bought, I was lucky as it was not advertised properly. It actually had a better diesel engine, 6 speed gearbox and wasn’t registered at all with the DVLA as it was an ex rental hatchback, that had their own insurance agreements for small damaged claims. I drove this or 4 years and still made a profit when selling to the trade. But it took nearly 4 months to find it and I went down to the yard to figure out the values of the lots before I bought. So it can be done, you just need to spend the time to get the right project first.
Add Up The Costs
A good start is to use CarSpareFinder to add up the cost of components before you buy, then factor in transport and have you got access to the specialist tools you sometimes need to do the work. Don’t forget diagnostic tools and many electronic items need programming to the ECU or and immobiliser. If all this sounds too daunting, then it is not for you. But of when reading this, you have the answers, then you could save yourself some “wad” as you get yourself something newer flashier and cheaper.