Copart: Dynamics of the German Market

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You can explain both, please.

Online platforms like AUTOonline and CARTV are the most established ones in the German market for posting salvage advertisements. The insurance company sends the salvage offer to the customer or claimant, who then has to contact the salvage buyer. The insurance company will then pay the market value minus the salvage value. But what can happen is that the customer has, in the meantime, already sold their salvage for a lower price. That is one of the key issues in this process.

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Just a question; if the customer sees a higher salvage value for the car through, let's say, Copart and CARTV, why would they try to sell it on their own at a lower value?

It's because the customer doesn't care. They get the same amount of money whether they sell the salvage at a lower or higher value. The insurance company will pay up to the market value, and it's only a saving for the insurance company if the salvage value is higher.

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One of the things Copart has mentioned when they talk to people is that the highest bid an insurance company gets for a salvaged car isn't necessarily the best because it's not a binding offer. People don't bid aggressively, and hence the net salvage value that people attribute to the salvaged car isn't high enough. Is that correct?

It's also the reason why insurance companies usually use more than one selling platform. There can be clear differences, I would say up to 30%, or even 50% in extreme cases, in the bids on a salvaged car.

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