Buying a Car with a Salvage Title

Salvaged cars and salvage titles may sound forbidding to prospective buyers, but if you're willing to take on the risk, they represent an opportunity to save money when buying a car. Take a moment to understand exactly what a salvaged car is to see if this could be an option for you.

What Are Salvage Titles?

If your car or truck is in an accident and the cost of repairing the vehicle is too high compared to the value of the vehicle, your car insurance company will declare it a total loss.

Your insurance company will then take possession of the car or truck. In some cases, the car or truck gets sold to a repair facility and the vehicle is fixed or rebuilt. The new title that gets issued on the vehicle is called a salvage title.

Are Salvage Titles Worth It?

Total losses are not infrequent, but they don't always mean the car has been damaged in a way that makes the car worthless.

A big accident on a low-value car where the engine or other critical moving part(s) is damaged or destroyed will cost a lot to repair and will not likely yield a reliable car. Such an example would be a risky purchase of a salvaged car.

If, however, instead of engine damage, the vehicle suffers cosmetic damage, it will also be expensive to fix and could even be considered a total loss, but may be an attractive option to purchase as a salvage since the engine and other important parts are presumably in the same condition as they were prior to the cosmetic damage.

The most important factors to consider when thinking of a prospective purchase are:

  1. What elements of the vehicle were damaged enough to cause it to be labeled a total loss?
  2. Are those elements critical to the performance of the car?
  3. Are the costs of repair within my budget and worth the effort?

Dangers to Consider Before Buying

Risk of Future Repairs

It's not always possible to know what happened to a car with a salvage title and that's what creates such risk around buying one.

Low Value

Blue book values don't apply to salvaged cars or trucks. This means that if and when the time comes to sell your salvaged title car, it will be hard to determine what it's worth, and even harder to convince the buyer of that number.

Additionally, dealerships don't often want to accept a salvage title car as a trade-in, meaning you are likely to have to sell it in a private sale.

Another problem that can arise with a salvage title vehicle having little value is that in the event of an accident, your car insurance company is not going to pay out very much.

Buying a Car with a Salvage Title

There are many different ways to find a salvaged car to buy. They show up at auctions, and the Internet is filled with specialty sellers. Finding a place to buy the salvage title car is not the hard part—the issue is finding a good vehicle to buy.

Consider these tips before you start your search:

  • Take a mechanic with you. An inspection of the vehicle will be critical in determining its actual performance and value.
  • Ask for the original repair estimate from the insurance company.
  • Get a vehicle history report.
  • Plan your budget and financing options in advance of your search. Financing for salvage title vehicles is hard to find.

Buying a salvage title car is a lot of work. In addition to the thorough research and effort put into finding a salvage car worth buying, you have all the risks that come with buying a used car. Still, many people find this a great way to save money, especially when they find a car that can serve them for many years to come.

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