You’ve found a vehicle at a ridiculously low price, but when you investigate further, you find out it has a salvage title. Before you part with your hard-earned money, make sure you understand what you’re getting with this vehicle.
What is a Salvage Title
A salvage title is given to vehicles that have been involved in accidents or damaged in other ways and are declared a total loss by an insurance company. A total loss occurs when the cost to repair the damages exceeds the value of the vehicle. Vehicles with a salvage title can be used again once they’re fixed and pass an inspection.
But even if the vehicle passes inspection, it will still carry a salvage title for the rest of its life. When you buy one, they’re typically priced 20 to 40 percent below market value. It sounds like a good deal until you look at the risks involved.
Buyer Beware
If you’re considering buying a vehicle with a salvage title, the rule to remember is, “Buyer beware.” You’re taking a risk by buying and driving it, even if it is a great price.
- Repaired salvage title vehicles are typically cobbled together from multiple vehicles.
- You have no guarantee that parts have been installed or repairs have been done correctly.
- Safety features may be faulty, improperly installed, or non-existent.
- You may be told that the damage is “minor” when it was really major damage.
- Many insurance companies will refuse to insure a salvage title vehicle and banks won’t finance them.
- Salvage vehicles have no resale value, so you’ll never be able to trade it in towards another vehicle purchase.
When It Might Be a Good Idea
Even with the risks, some people can benefit from a salvage title purchase. But it’s a decision that must be made knowing what could go wrong and maintaining realistic expectations.
- A low cost allows someone without a lot of money or who can’t get financing to own a vehicle to get to and from work.
- Drivers may want to use a salvage title vehicle to commute around town, reducing the miles driven on a nicer or newer vehicle.
- Salvage vehicles can be used for parts to repair other vehicles.
If you’re planning on using a salvage title vehicle until the end of it’s life, resale value won’t be a concern. Before you buy, get a car inspection first. If it comes back with small or easily repaired problems, it might be a good purchase — based on your goals.
If you’re determined to buy a salvage title vehicle, find out if any carrier will insure it before you buy. Contact Charlotte Insurance so we can help you find the best auto insurance for your vehicles and let you know your options on the salvage vehicle that sounds like a really good deal.