Salvage titles: What you need to know before you buy a vehicle that has one

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If you’ve ever been in a serious auto accident or even purchased a car at auction, perhaps you’ve heard of salvage vehicles and salvage titles before. The truth is that in the car-buying world, there’s a major stigma attached to buying salvaged cars, but if you do your homework, you could drive away with a decent ride and some major savings.

If your vehicle has been declared a total loss by your insurer, before writing the car off, you may want to consider salvaging it. But let’s first explain what that really means.

Salvage titles: Everything you need to know

Having a car declared salvage is not infrequent, and that designation doesn’t always mean that the vehicle has been damaged in a way that makes it worthless.

Besides a crash, there are many reasons why a car could end up as a salvage vehicle. Thousands of cars a year are salvaged due to hail damage, flooding or other misfortunes like vandalism.

It’s no secret that buying a salvage car comes with a degree of risk, but if you’re educated about what’s involved, you’ll greatly minimize the chances of losing your hard-earned money.

In rare instances, it may not be always possible to know everything that happened to a car with a salvage title. That’s what creates such risk around buying one.

Salvaged cars are not rated in Kelley Blue Book or other automotive standard-bearers. That makes ascribing value to a salvage car very subjective. Many dealerships are reluctant to accept a salvage title car as a trade-in, making private sales the only alternative.

The main upside to buying a salvaged vehicle is that you can score a perfectly serviceable car for thousands of dollars cheaper than you typically can through a dealer. You also don’t have to worry about a salesperson pressuring you into making a purchase. Buying a salvage car is something that should be done at your own pace.

4 tips to know before buying a salvage vehicle

  • Get the original repair estimate: The insurance company should able to provide you with the original repair estimate that they quoted early in the process. This document will help you have an idea about what repairs should cost.
  • Have the car inspected: It’s always a good idea to have a mechanic with you during the inspection process. If not, see if you can get the car to a body shop. This way, they can alert you to any issues you may not see and objectively tell you about repairs costs.
  • Buy from a reputable source: Do your homework. Don’t buy from someone on the side of the road or in a chop shop. At the same time, even if a business or owner seems legit, check them out online before you hand them a check.
  • Do a VIN check: Always know the history of a vehicle before you buy. Here’s how to get a free VIN report.

You may be also considering salvaging your own vehicle after hearing from the insurance company that it will be totaled.

Here are a few things to think about when trying to decide about salvaging a wrecked car of yours:


3 questions to ask when deciding whether to salvage your vehicle

  • Is it in your budget? Most importantly, you need to determine if you can foot the repair bill with the partial settlement from the insurance company. If you don’t have the financial means to pay for the fixes, having a salvage car will be of little benefit.
  • Does your low-value car need major repairs? If your car is relatively low value, it may be best to consider a newer vehicle rather than spending a lot of money to get it fixed, especially if you were taking it to the mechanic frequently before your accident.
  • Is the engine damaged? Find out exactly what needs to be replaced or repaired. If your vehicle needs extensive engine work, it likely won’t be worth it. But if the damage is mostly cosmetic, although costly, it may make sense to save a car that still runs great and is intact.

Now that you know what constitutes a salvaged vehicle and title, here’s what to do if your car is totaled.

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