Business model of insurance companies

The business model of insurance companies is based on getting an economic benefit from a broken insured transport. Insurance companies selling cars represent a relatively young business. It usually deals with private companies.

If the insured car can not be restored or its owner does not want to repair it, the insurance company may leave the vehicle in its possession. In such a case the insurance company pays the former owner its residual value. These cars are of a great popularity and demand in the auto market so insurance companies have very quickly understood that selling them is a very profitable business.
You can find out more about damaged cars you can buy from the insurance companies via their websites or specialized sites. Before selling the car insurance company conducts a thorough check on the vehicle registration documents. That means that to buy a stolen car or a car whose owner is suspected in any crime is almost impossible. Also, before selling damaged car insurance companies carefully check whether the car was not bought using the loan or taken on lease.

When buying a broken car you must be very careful because the small external damage to the vehicle may hide more serious internal defects which can lead to expensive mending. When buying a car after a crash it is better to consult an independent expert who can identify the final cost of repair.

Most often the insurance companies sell damaged cars of famous brands. Though their residual value is quite high it is still much lower than the price for the new business class cars. Novice drivers who want to learn to ride a comfortable and convenient car with automatic transmission rather than a cheap car equipped with manual transmission are one of the main target markets for insurance companies selling broken cars.

Small companies often get broken cars to dismantle them. They spare parts of the car which remained undamaged after the accident so that later they can be sold or used to repair other cars.

The number of insurance companies selling broken cars increases every year. This happens mainly because it is easier for the car owners to receive compensation from the insurance company than to search for intermediary firms.

Read also:

Leave a Reply

Your email address will not be published.