Everything You Need to Know About Buying a Car with a Salvage Title


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Written by
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UPDATED: 2021-04-12T20:55:43.754Z
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A person handing car keys over to someone who is buying a car with a salvage title.

The term 'salvage' is probably the last thing you want to hear when buying a used car. A salvage or rebuilt title goes to a vehicle that has been in a serious accident. The cause of damage to salvage vehicles can also include a natural disaster, theft, or a vehicle recovered by police. To answer the question, Should I buy a car with a salvage title? Likely, no, but not always. There are certain risks associated with cars with a salvage title including the difficult to get car insurance. Read on to learn more.

What You Need to Know

Although they are usually priced much lower than other vehicles on the market, a salvage vehicle may not be the reliable car you want. Still, salvage cars may be right for a certain type of person. Here is what you need to know before buying a car with a salvage or rebuilt title.

Should You Buy a Car with a Salvage Title?

In all honesty, if you are not a mechanic or a professional in the car field, you probably shouldn't buy a vehicle with a salvage title. You need to make sure you have done some research before your purchase. You must know that buying a salvage car may also mean taking on a large project.

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What Does a Salvage Title Mean?

When insurance companies declare a vehicle a total loss after it takes serious damage, it becomes a salvage vehicle. There are usually 50%-90% repair costs of the vehicle's value before the accident. You may not be able to drive a salvage car.

What Does a Rebuilt Title Mean?

You can drive a car with a rebuilt title, with all damage repaired. A salvage or rebuilt brand stays with the car’s title forever. Salvage and rebuilt titles for vehicles can be interchangeable. Each state has its own definition of what a ‘rebuilt’ title means.

Car Accidents and Salvage Titles

When a car is in a significant accident, the owner may declare it a total loss, or they may still decide to keep it. If a car is old and does not have high resale value, even a minor accident can turn it into a salvage vehicle. Each state has its criteria when determining if a car is a total loss.

Why Keep a Total Loss Vehicle

Car repairs can be very expensive, but you may want to consider keeping the parts. If you believe it is possible to fix the car, wait until the time is right. Maybe you need to save up some extra cash or find the right mechanic that you trust. If you just can't part with your ruined vehicle, contact your insurance company to check if they will allow you to keep it.

The Benefits of Buying a Car with a Salvage and Rebuilt Title

If you consider yourself handy with cars and are looking for a project, it might be a good idea. If you are looking for a cheap vehicle, although it may come with some hassles, you might get a car that beats the odds and holds up for you.

The Downsides to Buying a Car with a Salvage Title

The downsides outweigh the benefits when buying a salvage-titled car. The repairs may be very costly. You will probably struggle to find an insurance company to insure you. You may even be putting your safety at risk.

State Laws on Salvage Cars

Each state has its own set of laws about salvage and rebuilt titles. Each state has a percentage of total damage they consider before giving a car a salvage title. In some cases, there are specific guidelines for rebuilding a salvage car. For example, California allows re-registration of revived junk vehicles with the appropriate forms and fixes.

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What To Check Before Purchase

Before you make that purchase, do your homework. Here are some things to do and things to consider before buying.

Fraud

Check to make sure that the salvage-titled car is telling the truth about the severity of the damage. If you buy a car as-is, you have no way to check out the repairs. Never send money or pay for a rebuilt car without seeing it first.

The Vehicle History

Find out what happened to cause the salvaged title. You should check to see how the owner maintained the car before the accident. Consider a pre-purchase inspection. Many companies provide a used-car vehicle history report.

Find a Certified Mechanic

Certified mechanics have the proper training and tools to tackle the biggest vehicle repairs. Certified mechanics have fulfilled the necessary requirements to prove themselves knowledgeable. Although you may be handy, trust a professional to make sure your car is safe.

What You Need From The Seller

  • A list of all of the previous owners
  • Maintenance
  • Written proof of repair
  • Receipts for further proof of vehicle repair

Can You Finance a Salvage Car?

Should I buy a car with a salvage title, and how can I finance it? Banks or lending companies do not like to lend buyers money on salvage-titled cars. Banks and lenders know that the resale value is not as reliable and that they may not get their money back that they lent you.

Pre-Purchase Inspections

A third party does a pre-purchase inspection. Consider a professional company. This inspection will thoroughly evaluate the condition of the vehicle before you make an offer.

Will A Salvage Title Affect My Insurance?

Insurance companies do not regularly insure salvage or rebuilt titled vehicles because they fear that it will be difficult to determine if any new damage came from the current or old accident. Once a car becomes “unfit to drive”, it has a much higher chance of breaking down than a newer car without this history.

What Happens When You Need to Sell?

Salvage or rebuilt-titled cars have very little resale value. Dealerships do not usually accept salvage vehicles as trade-in offers. Private sales are just as tricky since salvage cars are hard to price based on market value. Be sure to find an online pricing guide to assist in finding accurate market value.

Some Additional Reasons for Buying a Salvage Car

Restored antique cars that are not yet road-worthy may also receive a salvage or rebuilt title. People often purchase and build kit cars as a hobby, which means they often do not properly register them. Both types of cars require a clear inspection by a trusted mechanic before driving.

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