Should I Buy a Rebuilt Total Loss Car To Save Money?

The new and used car markets are starting to moderate after a few years when prices went off the rails.

Still, price corrections and inventory size are recovering in an uneven fashion. It has taken and may still take patience to find a good deal on the vehicle make and model that you want.

Even then, you have to play a guessing game in terms of whether prices will continue to go down or if you’re buying at the right time.

What if there was a better way to score a great deal on a car you want? Perhaps by purchasing a car that has been in a wreck or has had some other sort of issue?

That’s what a listener of the Clark Howard Podcast recently asked.

Should I Consider Buying a Rebuilt or Totaled Car?

Is it crazy to think about buying a rebuilt car? Perhaps one that has been in an accident or has experienced some other mechanical issue?

That’s what a Clark listener suggested on the June 15 podcast episode.

Noted Reg in New Hampshire: “Used car prices are still high. In the wake of this, it seems a growing sort of niche market has risen. Rebuilt total loss cars. There are a number of dealerships thet sell nothing but these.

“I have three credit unions. Only one will finance these with conditions such as 25 percent down and inspection by one of their inspectors. I think Clark should address this growing niche so buyers know what they are getting into. I have had one of these years ago. Had it inspected and owned it till it dropped and was a great value for me.”

Clark has a friend who, ever since her first vehicle, has exclusively bought and driven salvage-titled cars.

“It’s very possible if you are very careful to buy a salvage title vehicle, one that was totaled by an insurer, and have something that’s safe to put on the road and you can feel comfortable with it,” Clark says.

“But you’ve got to know what you’re doing. Because if not, you could end up with something that’s nothing but trouble.”

What These Vehicles Are Called and Where To Find Them?

So where do you find a rebuilt car?

These vehicles can be labeled differently depending on your state and your state’s DMV.

Vehicles that have been in a wreck, especially those totaled by insurance, have “kind of like a spoiled title,” Clark says.

Some dealerships sell what have long been considered “lemons” — cars that seem doomed from the moment they leave the manufacturer, for whatever reason.

However, sometimes the reason for getting sent back to a dealership could be as benign as an electronic seat recliner not working properly.

“A lot of insurers now will also total a car that is in no way severely damaged,” Clark says. “It could be as simple as the airbags deployed in the vehicle.”

Some dealerships specialize in these types of vehicles. You still need to get an inspection, get full details about what went wrong with the car in the past and make sure you’re getting a good price. But there are deals out there.

“I should mention a lot of times in the disclosures now, you’ll see that the dealer selling the vehicle, and sometimes they are specialty dealers like you’re talking about, will put right in the listing that it is a salvage title vehicle,” Clark says.

“And makes you aware up front that that’s what you’re getting into.”

What To Avoid: Don’t Mess With Flooded Vehicles

One type of car you should avoid at all costs, no matter how much money you may save? A vehicle that’s taken flood damage.

“Because those are nothing but trouble for the entire time you would ever end up with one,” Clark says.

Final Thoughts

You can find a great deal on a car that has been in a wreck, totaled by insurance or simply labeled as a lemon.

Just make sure you get it inspected by a good mechanic before you buy it. And make sure that you totally understand what went wrong with the vehicle in the past.

If you’re meticulous in your research process, these types of cars can provide outstanding value.