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How does auction car insurance work? Find out here!
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Yes, it is possible to take out insurance for auction cars — but there are rules. Find out what they are and how to take care of your well-being in the text!

5 mistakes you shouldn't make when choosing the best car insurance

Purchasing insurance for auction cars is a little more work than for a “regular” car. This is because it is necessary to prove that the vehicle is within the law. This proof must be done with the help of Detran (State Department of Transit).


All this care exists because there are cases in which the car is sold irregularly. For example: the chassis may have been altered after an accident.

If this information is not available, the consumer may not inform the insurer. So, the company will insure a vehicle that is very different from what you expect.

In our example, it is quite likely that the car has a greater chance of an accident. After all, he has already suffered an accident serious enough to have his chassis changed. If the vehicle's risk was incorrectly understood, the insurer could lose out.

Worse: it could claim that the user acted in bad faith by not reporting the real condition of the car. Thus, compensation would be denied after a new accident, leaving the insured at a loss.


To avoid problems of this type, insurance companies require a vehicle inspection report carried out by Detran. Through it, you will be able to prove that the car is legal, and also indicate its real conditions. Especially mechanics.

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In addition to this report, it is essential to take other precautions. Not only when taking out insurance for auction cars, but also when purchasing vehicles of this type. See below!

How does auction car insurance work?  Clear your doubts!

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Who can auction a car?

The first step to protecting yourself from a bad deal is to evaluate the auction carefully. First: it must have been authorized by the City Hall of your city. This will give you more security that the cars sold are legal and in good condition.


With the authorization of the City Hall, banks, insurance companies and company fleets can auction a car. Just like an individual who wants to sell their vehicle. In this case, it will be necessary to outsource the process to a company specializing in auctions.

Another important tip is to inspect the car before purchasing it. To do this, you must enlist the help of a trusted mechanic. The professional will be able to tell you whether the car is in good condition and whether it is worth purchasing. After all, there may be cases in which repairing the vehicle will be so expensive that its purchase will generate a loss.

Finally, pay attention to all vehicle and auction documents. They must be clear and detailed, as this will give you more security about the information.

What types of auctioned vehicles are insured?

There are several types of vehicles auctioned, but only some of them can be insured. The restriction occurs because, in some situations, insurers do not accept the risk of protecting the car.


Normally, an insurer's denial occurs because the risk of loss will be high. Consequently, the chances that compensation will need to be paid are greater. Loss to the insurance company.

Therefore, we explain below what types of cars are auctioned, saying when it will be possible to take out insurance for auction cars or not. Follow along!

Car with minor accident

  • Can I take out insurance? USUALLY YES

If the auctioned vehicle has already suffered any accident, this will probably be noticed by inspecting the car. Thus, the insurer will assess the severity of the accident, and whether it left “after-effects”. When the damage is slight, there are usually not as many consequences. Then, insurance can be taken out.

Car with medium or large accident

  • Can I take out insurance? DIFFICULTLY

When the car suffers a more serious accident, it is likely that the damage will leave “after-effects”. So, the chances of new accidents happening are high.

But there is still a way out, with more basic insurance. Protection against car theft and theft will not take into account any previous accident. Therefore, you can be easily hired.

However, with basic insurance, in the event of any other accident, the driver will bear the loss alone. After all, the insurance company will not offer protection.


Car with “claim recovered” or “claim compensation”

  • Can I take out insurance? NO

Having a car with a “recovered accident” means that the car suffered major damage. If the situation was more serious, the consequences for the vehicle will probably remain. Especially in its mechanics. No insurance company wants to take the risk of paying compensation so soon.

The same happens for a car with “loss compensation”. After all, this means that the car will have been recovered after 75% damage in an accident (total loss). Buying a car like this is “buying scrap”.

Financing car

  • Can I take out insurance? YES

A financed car is one that was “taken” from the consumer because he did not pay the installments. Therefore, it is quite common for it to be in perfect condition. If the Detran report shows this, the insurance company will have no problem protecting the vehicle.

Car with rebranded chassis

  • Can I take out insurance? USUALLY YES

Finally, there is the possibility of taking out insurance for auction cars with rebranded chassis. Normally, the chassis is remarked when the car suffers an accident that damaged the marking. Or else, due to the corrosion of time. If the assessed damage is not serious, protection will be easy to acquire.

Auction car insurance: step by step

If you've read this text so far, you already know when it's possible to take out insurance for auction cars. Now, it’s time to find out how to make this hire! See the steps below.

1. Request a Detran inspection

The first step in taking out insurance for auction cars is to have it inspected by Detran. In fact, this step will even be necessary to regularize the vehicle, transferring it into your name.


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With the report in hand, you can look for the insurance company you want and request an insurance quote. The company may, if it wishes, carry out a new inspection of the car.


2. Request a quote from the insurance company

To get a quote for car insurance, you must inform the insurer of the coverage you want for the vehicle. You will be able to protect it, for example, against collisions, falling objects on the car, fire, theft, theft and more. The number of coverages directly influences the cost of protection.

Another factor that influences the cost of insurance is the driver’s profile. In other words, your age, length of driving license, accident history, etc. The more experience behind the wheel and the fewer problems the driver has had, the greater the chances of purchasing cheaper insurance.

Several other factors are considered for the quote, and will be indicated by the insurer. Then, the company will evaluate the car and its risk of accident, presenting the protection costs.

3. Wait for the quote to return

Finally, the company will tell you how and for how long it will insure the car. Then, you can negotiate the conditions and reach a good agreement. With the signing of the contract, the vehicle will be protected.


Either way, it doesn't mean your insurance is guaranteed. As mentioned throughout the text, some types of cars auctioned are difficult to insure.

Not to mention that insurance companies may consider the driver's profile to be at risk, making it not financially worth it to protect him. Therefore, it may refuse to guarantee the service.

4. What to do if the insurance company denies insurance?

Regardless of the reason for denial of insurance, the company must justify it. This way, the consumer can try to correct what is incorrect and request a new quote.

If it is not yet possible to take out insurance, you can try to protect your car against theft and theft. As coverage is simpler, it tends to be more easily contracted.


It's still worth saying that one insurance company may not accept the car, but another may. Therefore, it is essential to obtain quotes from different companies. Because, with this care, you will be able to find a more affordable price.

Attention! Auction car insurance has reduced FIPE

When taking out insurance for an auction car, one point stands out: the price considered for the vehicle. This price is decisive for compensation in the event of an accident, which will be paid by the insurance company.

Basically, an auctioned car does not use the total FIPE table. In other words, it does not use the total value, indicated in the FIPE table, as the market value of that vehicle. Mainly because, at auction, the car will have been purchased for a much lower price.

Therefore, pay attention to the contract and the amounts that will be paid in the event of a vehicle accident. This will give you more security, as it will tell you how much you will be entitled to cover for your losses.


Ready! Now you know everything you need to know about insurance for auction cars. Don't forget to get quotes from several companies, and be careful when buying your car. Knowing the origin and real condition of the vehicle is essential.

How does auction car insurance work? Find out here!

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How does auction car insurance work? Find out here!


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