Why you shouldn’t (generally) buy a salvage title car

If the term “recovery title” stops you in your tracks, you are not out of place.

Salvage title cars attract some buyers because their price is significantly lower than the market price. It might sound like a good deal, but in the end, they come with a lot of risks. We suggest you get a safer offer by buy a cheap used vehicle and be pre-approved for funding.

Salvage title cars can represent opportunities for a select group of buyers, but even then cars should be viewed with caution – and most buyers should avoid them altogether. Here’s all you need to know.

What are Salvage Titles?

A vehicle receives a salvage title when it is damaged so badly that the insurance company declares it a total loss. Depending on the laws in your state, this happens when repairs to the car would cost 50% to 90% of its pre-crash value.

“The reasons for the salvage title vary. This could be the result of flood damage – which, even if aesthetically repaired, could lead to mold problems later – repair after being totaled in an accident, hail damage, damage caused by smoke from a fire. … There are many reasons, ”says Matt DeLorenzo, editor of Kelley Blue Book.

Before putting the totalized car back on the market, the insurance company takes possession of it, issues a salvage certificate and sells it to a repair shop. Even after being rebuilt, the car will retain its salvage title, which significantly reduces its market value – in 20% to 40%, according to Kelley Blue Book. But the company stresses that it does not place any value on salvage title vehicles because it assumes the vehicles are in poor condition.

The risks

There are many drawbacks to buying a salvage title car. Most importantly, you may not know the extent of the damage that caused it to be declared a total loss. There are also other factors to consider:

Security: There are reports of rescue car rebuilders using economical tactics that reduce safety corners, such as installing faulty transmissions or seat belts. For example, in a case settled in 2009, Bobby Ellsworth’s family received millions after the Californian teenager died in an accident because a body shop owner faked the installation of airbags.

Fraud: Many people selling salvage title cars claim the damage was minor and cosmetic, but it can be difficult to know who is telling the truth. And there’s not much the buyer can do if the car turns out to be in poor condition. “The seller can provide documents proving that there have been repairs. However, the salvage title also implies a sale as is, ”says DeLorenzo. “There is no warranty on the condition and no legal remedy if the seller has disclosed the salvage title.”

Difficulty securing or financing: Most auto insurance companies only offer limited coverage for salvage title cars – or refuse to cover them at all – because it is so difficult to give them precise values. Banks also view salvage cars as a risk and rarely provide them with financing.

No resale value: Dealers almost never accept salvage vehicles as a trade-in, and private sales can be just as difficult. Salvage cars cannot be accurately priced by online pricing guides such as Edmunds or Kelley Blue Book, making it difficult to convince buyers of a reasonable price.


To save money: Arguably the main appeal of buying a salvage title car is that these cars are priced significantly below market price, typically 20% to 40% less than the same title-specific car. . Cars that are inexpensive to start with suffer a much larger drop in value. Even a 50% drop is “easy to imagine,” says Matt Jones, editor of consumer advice for Edmunds.

“But when you’re talking about a car that would normally be worth, say, $ 100,000, being a salvaged title isn’t necessarily worth $ 50,000,” Jones warns.

Find a diamond in the rough: There are times when a salvage title car is only slightly damaged but still sold for a low price. A hailstorm can damage the body, but leave the engine and interior intact. Older vehicle models may have lost market value to the point that they are totaled even though they only require small repairs. Cars recovered after being stolen could receive a lifesaving title without ever having been in an accident.

“When cars are stolen, the bad guys are often just looking for parts. If a car is stripped of its seats, airbags and electronics, the costs of replacing items can exceed the actual value of the vehicle, ”says Jones. “But if the vehicle is ‘complete’ again, that can certainly be a good find.”

Get a source for the parts: Some people buy salvage title cars to use them as a “donor car” for parts. Others like to repair the salvage title car themselves.

Who are they good for?

Considering the pros and cons of purchasing a salvage title car, the pool of ideal buyers is small. This includes buyers who:

  • Have sufficient mechanical knowledge to inspect the car and possibly resolve repair issues.

  • Know the seller and have full knowledge of the cause of the salvage title.

  • Plan to keep the car for as long as it depreciates completely, which makes resale a non-issue.

  • Need a second car rarely used, maybe for a vacation home.

  • I can’t get a loan and have to pay cash for a car. Buying the right salvage title car will allow them to drive more cars for less money.

How to buy one

If you are determined to buy a salvage title car despite the risks, take the following steps to ensure a safer purchase:

Have a trusted mechanic perform a full inspection: Do not rely on the description of the mechanical condition of the current owner.

Obtain a vehicle history report: He might have additional information on the incident that led to the rescue title.

Learn as much as you can about its damage: Ask the seller for repair records and estimates or speak to an employee of the body shop who performed the repairs.

Consider an unsecured personal loan: Paying cash in advance can be intimidating. You may be eligible for an unsecured personal loan based on your payment history and credit score. Remember to compare rates and find the best personal loan for your credit.

Find out how long ago the rescue permit was issued: While it was released years ago and the car has been driven regularly since then, the repairs were apparently adequate. If the accident or damage has occurred recently, the uncertainty is greater.

About Frank Torres

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