Boats are salvaged on two conditions. The first condition is on the basis of the damage type. This is when the boat is damaged to an amount that the cost to repair it would exceed the market value, or repair would not get the boat back into the condition that it was in before the damage. The second condition is related to a declaration of constructive total loss.
The simple equation considered for this is, agreed insurance value less salvage value is less than the cost to repair.
Buying a salvage boat is considered dicey, which is justified. However, if you consider the following 5 things when buying a salvage boat at an auction, it can turn out to be a good bargain:
- Check the damage type and its extensive-The first thing you need to check when looking to buy a salvaged boat is its damage type and severity. Make sure you choose to buy one that can be made functional with affordable repair expenses.
- Decide on your budget – You can use the NADA, BUC and the ABOS Marine Blue Book to know the worth of a boat after restoration. These are some authentic evaluation agencies for salvage boats. The total cost involved in getting the boat back to normal functionality should not be more than 80% of this value.
- Kind of repairs needed – If the boat was sunk in water, find out whether it was saltwater or freshwater. If it was submerged in freshwater, the repairs needed may not be as extensive as they would be if the boat sank in saltwater. This is the best way to judge the kind of repairs needed if the boat was salvaged because of its sinking.
- Estimation of repair cost – Most, if not all salvage boats need extensive repairs, if they are to be used again. The repair involved may be complete structural repairs which involve extensive use of labor. So, make sure you are aware of the repair cost before deciding to bid on a salvage boat. Some online salvage auction sites offer this facility. You may opt for inspection service offered by some websites (at a fee) and avoid traveling to an auction lot away from you.
- Clean title and documentation – Make sure you choose a reliable auto auction which provides a clean salvage title with all the relevant documentation.
Your best bet to find a salvage boat that satisfies the criteria listed above is to log on to a reputable online auction site. The extensive range of live boat auctions that represent you give you a better chance to find the boat you are looking for.