Technique to Calculate the Cost of a Salvage Vehicle Individuals who look for an affordable drive prefer salvage cars because of the price benefits associated with them. Many online auto auctions for public are held throughout the U.S. to sell salvaged and used vehicles. It might not be possible to predict the accurate cost of a car or truck that is up for bidding, but buyers could make a rough estimate of the worth of the vehicle. There is no standard formula to calculate the cost because it depends on the model, make and type of the vehicle. If we talk about salvage vehicles, the extent of damage also plays an essential role in estimating the cost. Let's look at some factors a bidder might consider for calculating the price of a salvage vehicle at an auto auction:
Get the details of the vehicle Buyers can refer to the Kelley Blue Book or NADA guide to find out the retail price and trade-in value (also known as the wholesale value). The buyers might need to fill in the type, make and model of the vehicle to get the details.
Reduce the retail cost Deduct around 40-50 percent from the retail value to get the approximate price of the salvage vehicle. Deducting 50 percent, however, might not give the exact value of the salvage vehicle because it is a ballpark figure. The actual damage suffered by the vehicle helps you decide its final price. If a buyer turns to the insurance company for price estimation, remember that they usually deduct 75 to 80 percent from the retail cost of the vehicle.
Calculate the current market value The current market value of the car would be an average of the retail and trade-in value. Add both the figures (retail cost with estimated value of insurance company or appraised value) and divide the total by two to get the current market value of the vehicles. You can also use the depreciation percentage to find out the current market value of the vehicle.
Calculate the salvage value Use the market value and the percentage given by the insurance company to find the approximate salvage value of the vehicle. If the market value of the vehicle, for instance, is $6,000 and the insurance company gives 80 percent as the estimate figure, the salvage value of the vehicle would be $4,800.
Last few words There are some auto auctioneers who allow the buyers to inspect the car and calculate its approximate value before bidding starts. Buyers can seek the help of a trusted automobile mechanic for salvage car valuation.