What is a Salvage Car?
Have you noticed an almost brand new car driving in front of you but on reaching the front area of the car, you find out that the car is badly damaged? you will just be there wondering what went wrong with the car. Well, it is just a salvage car that was probably involved in a roll-over car accident in the USA.
Salvage cars stacked up in a Junk Yard in the USA
A salvage car is a car that has been labelled not repairable by an insurance company in developed countries because the cost of repairing the car is more than the value of buying a new one for the owner of the insurance claim. In developed countries, car owners don't have to think of what to do after a car accident, they just call in their Insurance companies.
The most common causes of salvage car titles to cars are; accidents, flooding, and fire incidents. Once the Insurance companies do their maths and discover that the cost of restoring that car back to factory settings is more than the value of buying a new one for the owner, they just declare the car a 'Salvage Car'.
I am sure you are wondering why people buy and import salvage cars into Nigeria.
Why do people import Salvage Cars into Nigeria?
Some salvage cars are repairable. I mean, they can be restored to run normally even if the car has to lose one or two functions. Nigerians see this as an opportunity to buy their dream cars at way cheaper prices than normal.
Yes! Insurance companies sell salvage cars at like 40 - 60 % of the normal worth of the car.
This Urus might get sold at the price of a 2018 Camry...just buy then fix (you better be lucky)
In Nigeria, there are a lot of automobile parts dealers and technicians that can restore a car to its normal state. You can easily find that car you always wanted with a salvage title, buy it, import to Nigeria, then repair it for your personal use or resell.
As long as the extent of damage on the car is repairable, it is a way to just save money on buying recent year model cars.
>>> Check here for the 10 ways to inspect salvage cars when buying
Are Salvage cars safe?
Salvage cars have different levels of damage. The level of damage determines how cheap the Insurance company will sell it to buyers. In the USA for example, salvage cars are regarded as unsafe cars that are not worthy of running on the road until they are properly fixed.
This can no longer be repaired, it is a write-off
These cars are very difficult to register and re-insure in fully developed countries once they have carried that salvage title but in Nigeria, this does not apply. The moment you ship in a salvage car into Nigeria and repair it, the salvage title magically disappears.
This is why it is very safe to buy them, import them, and fix them for use/sale. Assuming Nigerian Road Safety and V.I.O thoroughly inspect cars about to be registered in Nigeria, then maybe salvage cars would be ratted out. This is why the salvage car business in Nigeria can easily work.
How to buy Salvage Cars?
Salvage cars now have websites you can trade from easily. These websites have listings of salvage cars, their price, and the extent of repair it needs. All you have to do is shop for the car like you are shopping for a new shoe.
Insurance companies are the major dealers of salvage cars
After you buy the salvage car, you hire a shipping company to ship the car down to Nigeria then you do the necessary paper works and customs. The customs duty on salvage cars is the same as the customs of normal cars. The only way you won't pay the customs duty for normal cars is if you ship in the car as bits. Maybe you cut it in half which doesn't make any sense.
What is the Savings on Salvage cars?
Salvage cars sell for less than 50 per cent of the normal selling price and that is incredible savings. Look at the analysis and pictures below for a Lexus 2010 IS250 and see why the salvage car business is something you should consider getting into.
|Normal Lexus IS250||Salvage Lexus IS250|
|Cost of Car from U.S.A||₦3,000,000||₦900,000|
|Shipping & Clearing costs||₦1,500,000||₦1,200,000|
|Repair Costs before the sale||₦0||₦200,000 - ₦1,500,000|
|Selling price||₦5,500,000||₦4,500,000 - ₦6,500,000|
|Profit on investment||₦1,000,000||₦1,000,000 - ₦1,800,000|
You can see that the profit margin on repairing and selling salvage cars imported from abroad is more than the normal car sales business. This extra profit is the gain on the risk you took. Note that if you end up buying a salvage car that has more issues to be fixed then you might end up not gaining even up to a million.
How to repair a Salvage car in Nigeria?
- Step 1: Once you ship in a salvage car and do the necessary paperwork.
- Step 2: The next to-do is to get a trusted technician/body specialist/electrician to run a proper diagnosis on the car.
- Step 3: Get the repairs done and subject the car to a 3 days extreme test, just to make sure it runs normally.
- Step 4: Go ahead and place it on sale because you deserve some accolades.
This is the face of the salvage car business
What is the Profit of reselling Salvage cars?
Just because this is Nigeria, you will resell that salvage car you restored at the normal market price if the restoration was well done.
Salvage Nissan Sports car repaired back to normal
Your customer does not have to know that they are buying a restored salvage title car. It would not your selling price if they know. If you restore the car properly, then you have succeeded in performing what is called "Title Washing".
You would have heard about a lot of people talking about why people buy and import salvage cars into Nigeria. Now you can see that it is very profitable if done well. "If done well" simply means you should only buy salvage title cars that can be completely restored to normal. Make sure every dashboard warning light is properly tackled.
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