Can You Buy Cars From Insurance Companies?

Last Updated on December 12, 2025

You may have heard about “buying cars from insurance companies.” In a way, that’s true: when insurers declare vehicles a total loss, they often sell those vehicles through salvage auctions—sometimes at steep discounts compared to clean-title cars.

Most of these vehicles were part of total loss insurance claims and may have salvage (or other branded) titles. That can mean big savings, but it also means higher risk, more paperwork, and more “buyer beware” than a normal used-car purchase.

Typically, insurers don’t sell vehicles directly to consumers. Instead, you buy them through third-party salvage auction platforms that handle listing, bidding, fees, and pickup.

Key Takeaways

• You usually can’t buy a car directly from an insurer—most totaled vehicles are sold through salvage auction marketplaces.
• Salvage-title cars can be much cheaper, but the “discount” often comes with hidden damage, fees, towing costs, and title/inspection hurdles.
• Who can bid (public vs. licensed) depends on the auction, the vehicle, and your state—some purchases require a broker.
• Insuring a salvage vehicle can be difficult; many companies offer liability-only, and full coverage may require a rebuilt title and inspections.

Yes, You Can Buy Salvage Vehicles from Insurance Companies at an Auction

In most cases, you can’t walk into an insurance company office and buy a car directly. The common path is a salvage vehicle auction run by an auction marketplace where insurers liquidate totaled vehicles.

When a vehicle is involved in a total loss claim, the insurer decides it’s not economically practical to repair. The insurer pays the owner the vehicle’s value (minus any deductible or adjustments), then takes ownership of the vehicle and sells it through an auction.

Those “total loss” decisions are influenced by state rules and insurer guidelines. In some places, a vehicle becomes a total loss when repair costs hit a certain percentage of the vehicle’s value. Other states use a formula that compares repair cost plus salvage value to the car’s actual cash value. The details vary by state and claim.

Once the vehicle crosses the total-loss line, it may receive a branded title (often salvage). Repairs exceeded the total loss threshold, which is why the claim was treated as a total loss.

How a Salvage Title Works

Every vehicle has a title. A salvage title (or other branded title) is issued when a vehicle is considered heavily damaged or totaled under state rules. A car that has never been totaled should have a clean title.

Let’s say you have two 2021 Ford F-150 trucks that look identical. If one has a salvage title and one has a clean title, the salvage-title truck is usually worth less—and can be harder to finance, insure, or resell.

In many states, a vehicle can’t be registered for road use with a salvage title. After repairs, you may need to pass inspections and apply for a new “rebuilt” (or “reconstructed”) title before you can legally drive it. The exact terminology and process depends on your state.

How Salvage Title Vehicle Auctions Work

Most insurers sell totaled vehicles to salvage auction marketplaces, which then list the cars online. Auctions may be fully online, or online with local pickup at an auction yard.

Two of the biggest names you’ll see are Copart and IAA (Insurance Auto Auctions), though there are other regional marketplaces and brokers.

Who can bid?

Eligibility depends on the auction platform, the vehicle, and your state. Some vehicles are “public” (no dealer license required), while others require a dealer/business license or using a broker.

Even when public bidding is allowed, specific states may restrict what the public can buy (or how many vehicles you can purchase per year). Always check the listing requirements and your state rules before you commit.

How you pay and pick up

After you win, you’ll pay the winning bid plus buyer fees (and sometimes gate, storage, documentation, and other charges). Pickup is usually time-sensitive. Many salvage vehicles aren’t road-legal or safe to drive home, so plan on towing or transport.

What to Know Before You Bid

Salvage auctions can be a great deal—but only if you understand what you’re buying and what it will cost after the hammer price.

• No test drive: you generally can’t test drive a salvage auction car. Some auctions allow in-yard inspection; others are closer to “as-is, where-is.”
• Read the listing carefully: look for damage type, title type, whether it runs/drives, keys status, and any condition notes.
• Assume hidden damage: especially with flood, fire, theft recovery, or severe front-end impacts. Photos don’t show everything.
• Budget for fees and transport: buyer fees and towing can add up fast and erase the “discount.”
• Know your state’s rebuilt process: inspections, receipts, parts documentation, and title rules vary widely by state.

If you’re not comfortable estimating repair costs (or checking for structural and safety issues), consider bringing a mechanic/body shop expert to inspect—when the auction allows it.

Why Buy a Salvage Vehicle?

Buying a salvage vehicle can make sense in a few situations:

Cost Savings: Salvage vehicles can sell for significantly less than clean-title equivalents. If the damage is something you can fix correctly (and affordably), you may end up with a usable vehicle at a lower total cost.

Spare Parts: Many mechanics, dismantlers, and DIYers buy salvage cars for parts—especially when the powertrain is good but the body is not.

Project or secondary vehicle: If you don’t need perfection and you can tolerate downtime and repair uncertainty, salvage can be a workable “project” path.

Just remember: the “discount” is there for a reason. You’re taking on repair risk, title complications, and potentially higher long-term ownership headaches.

Can I Buy My Own Car from My Insurance Company?

If your vehicle was involved in a total loss claim, you might consider buying your own car from your insurance company.

Sometimes, insurers let you keep the vehicle by subtracting the salvage value from your settlement and transferring the car back to you with a salvage title. Other times, the vehicle goes to auction and you’d need to bid on it like anyone else.

Rules and insurer policies vary, so if you want to keep your totaled car, ask early—before it’s moved to a salvage yard or listed.

It may also be possible to keep the car before the auction, depending on the insurer and state requirements.

How to Get Insurance on a Salvage Vehicle

Insurance can be tricky with a salvage title. Even if the vehicle has been repaired, the title history can affect what coverage options are available.

Many insurers will not provide full coverage car insurance on salvage vehicles. Some may offer liability-only coverage, and some may consider comprehensive/collision only after the vehicle is retitled as rebuilt and passes inspections.

In most states, you’ll need valid registration before you can legally drive the car—and that may require a safety inspection (or rebuilt inspection) first. If your vehicle can’t pass inspection, you may not be able to register it, insure it, or drive it on public roads.

Start here if you’re trying to insure a branded-title car: basic liability coverage for your salvage vehicle. And keep in mind: few companies are willing to insure salvage vehicles compared to clean-title cars.

FAQs on Buying Cars from Insurance Companies

Final Word on Buying Cars from Insurance Companies

Most insurance companies don’t sell cars directly to consumers. But you can buy vehicles that insurers have totaled—usually through salvage auction marketplaces.

Salvage auctions can offer real savings, but they also come with real risk: unknown damage, fees, towing, title complications, inspections, and insurance limitations. If you do your homework and budget correctly, it can be a smart way to buy a project car, parts car, or occasionally a bargain daily driver.

Before you bid, double-check your state’s title rules, understand the auction fees, and make sure you have a realistic repair and transport plan.