If you have spent any time searching for used cars, then you know how this story goes: you come across a great-looking car with a price that's too good to be true, only to discover that it has a salvage title. If you are like most car buyers, you immediately move on to the next ad. This is usually a good decision, but do you really know what a salvage title means? Although the majority of car buyers are best served by cars with a clean history, salvage cars can still make sense in many cases.
This article will help to educate you on exactly what to expect from a salvaged car so that you can make an informed decision on your next purchase.
What Does a Salvage Title Mean?
Put simply, a car with a salvage title has suffered damage in excess of the vehicle's value at the time of the event that caused the damage. Both the valuation for the vehicle and the damage estimate were likely determined by an insurance company, which purchased the vehicle from the owner at the estimated value. Cars with salvage titles may have been flooded, involved in an accident, recovered from a theft, or damaged in some other way.
One important thing to keep in mind is that the actual branding of a salvage title varies from state to state. Salvage branded vehicles may have "junk" or "totaled" titles in some states, for example. Often, a salvage vehicle is not road legal and may not be registered until it has been rebuilt. Rebuilt vehicles usually require inspection before their title is upgraded, after which the branding type changes (usually to "rebuilt," "reconstructed," or similar) and the vehicle is considered legal to register for street use.
When Should You Avoid Salvage Vehicles?
If you are looking for a newer vehicle or you are unwilling to spend time and money maintaining a vehicle, then salvage titles are likely not right for you. Since newer vehicles are worth significantly more, the threshold for totaling the vehicle is much higher. This means that salvage title vehicles are likely to have suffered very large amounts of damage, and even if repaired properly they may never function quite right again.
Likewise, even a full inspection and detailed repair records may not guarantee that a car has been fully and properly repaired. This means that there may be additional problems down the line that you may have to deal with. Consider the worst-case repair costs for the particular vehicle you are looking at and factor those into the overall price. You may find that the cheap salvage car you are looking at is suddenly much more expensive.
When Are Salvage Vehicles Worth Considering?
When it comes to older or lower value vehicles, salvage titles are often worth considering. Since the insurance company is likely to have arrived at a very low valuation for these vehicles, it is possible that they were totaled despite the damage not being too severe. Cars in this condition should always be evaluated on a case-by-case basis, but often purely cosmetic damage is enough to cause an older, less desirable car to be written off entirely.
Salvage cars can also make excellent projects. In cases where damage is largely cosmetic, you may be able to do repairs yourself for drastically less than the difference between the cost of the salvage car and an equivalent vehicle with a clean title. It is also worth keeping in mind that insurance companies are required to repair a vehicle to its previous standards, which can inflate repair estimates. If you are less concerned about the cosmetic appearance of the vehicle, you may be able to save money by cheaply fixing damage that does not affect the operation of the vehicle.
If you are interested in salvage cars for sale, contact a seller in your area.