You are walking in the streets or browsing online and boom! Your dream car. Looking amazing that it raises your goosebumps, with low mileage and above all, perfect price. But, in that jovial mood, you notice the word salvage title.”Now, should you buy that car? Read on to know.
What is a Salvage Title?
Salvage title defines a vehicle that is damaged so severely that the insurance company considers it a total loss. It may also mean a vehicle that’s damaged such that its repairing cost exceeds the value of the car.
However, that doesn’t mean that every vehicle with collision damage qualifies for a salvage title. A car qualifies for salvage title if it has:
- Collision damage from an accident
- Experienced hail damage
- Experienced flooding damage
- Experienced fire damage
- Been stolen, and contain missing parts, and other damages made.
- Been stolen and recovered, but the owner has already been compensated.
Also check out The Difference Between Car Title and Car Registration
A salvage title doesn’t put a mark of death on your dream car deal. However, it should flash a red light in your mind. And that brings us to the next topic.
Why it is not Worth Buying one
That’s the first and the most crucial reason why most people avoid them like the plague. Agreeably, most modern cars are built with safety as themajor concern. They’re fixed with improved technologies and complex structures that promote safety.
However, that’s not the case with many car rebuilders. They are in business. They want to go for cheap repairs to save a dime. Even worse, some of them skimp on airbags and structural alignment. Yes, the car may have been rebuilt by a pioneer mechanic, but that doesn’t guarantee your safety. You can’t be sure if the rebuilder installed airbags or not. Some of the mounted airbags don’t function.
High Fraud Instances
Most independent sellers or salespeople will try to convince you that the damage that was caused on such a vehicle was minor and cosmetic. How will you know that he/she is telling the truth?
Honestly speaking, some of the cars are damaged beyond what is termed as “economically viable to repair.”You don’t know the person who fixed it and the circumstances under which the car was fixed. You can’t tell if the repairs are appropriately done.
It’sworth noting that rebuilders want to make repairs as cheap as possible so that they can make huge profits after selling it.
More pathetic, there is a little (to nothing) you can do if you realize that the seller was lying or if the car happens to be in poor condition. Unfortunately, no warranty or guarantee on the car’s condition: you can’t take any legal recourse if the seller disclosed the salvage title.
Difficult to Insure or Finance
Auto insurance companies find it hard to place a value on cars with a salvage title. That said, only a few of them can write collision and comprehensive coverage for such cars. And if you encounter a willing company to insure you, they’ll limit the coverage.
When it comes to financing, you can’t easily access a loan. Most of the institutions will use the car as collateral for the loan. Therefore, the financial institution considers it too risky because the salvage vehicle is of little value. So, if you’re willing to buy a salvage car, be prepared to pay in cash.
No Resale Value
It’s tough to resell a salvage-titled car. Most of the auto dealers don’t accept salvage cars as trade-ins. Again, it’s difficult to sell such a vehicle on your own. Since salvage cars can’t be valued accurately using online pricing guides like Kelly Blue Book or Edmunds, you can’t convince a customer to arrive at a better price.
Risk of Ineligibility for Registration
One of the worst scenario-case occurs when a rebuilder sells the car when he has installed stolen spare parts from black markets. When the DMV or police notices it, your car or its parts can be seized, resulting in ineligibility for registration.
Why it’s Worth Buying
You save on Your Hard-Earned Money
Interestingly, salvage-titled cars are sold significantly below the market price. Imagine saving 20% to 40% of the money you could spend on a clean title car. A good deal, right?
Win a Lucky box
Some cars with salvage titlescan be slightly damaged. For example, one damaged by hailstorm can be faulty on the body, but the engine and the interior remain superb. Or else, a stolen car can be titled salvage without being damaged.
Benefit from Parts
Some people may buy these cars to supplement spare parts. Some experienced people buy to fix the spare parts by themselves.
The Bottom Line
The money-saving factor can tempt many people to buy a car with a salvage. In fact, everybody wants to save some substantial amount when purchasing their new car. That’s quite okay. However, consider the significant risks you’ll involve yourself.
However, these cars can be a good deal if you:
- are an experienced mechanic who can inspect the vehicle and fix any issue.
- know the seller as well as what caused the salvage title
- need a car for rare occasions
- want to keep it all your life- no reselling
Feel free to check out What’s Better for You – Car Leasing or Car Buying?