Are you considering buying a car with a salvage title? You’re not alone. Many people consider buying salvage title vehicles and then attempting to restore them to working order. With that in mind, here’s some of the most important information you need to know when buying a car with a salvage title.
What is a Salvage Title?
You probably already know that when a vehicle is in an accident that’s covered by the owner’s insurance, the insurer will pay up to a certain amount to have the vehicle repaired— unless the cost to repair the vehicle is above a certain threshold when it comes to percentage of the car’s actual value.
For example, if you wreck a car in a covered accident and the estimated cost to repair it is more than 85% – 100% of the vehicle’s value (depending on the state), your insurance company will deem the vehicle a ‘total loss.’ This means that instead of paying to repair the vehicle, they’ll simply pay you what the vehicle is worth, presumably so that you can purchase another vehicle of equal value.
But what happens to the vehicle that was written off as a total loss? If the owner decides to keep it, or decides they want to try and sell it, the vehicle is assigned what’s known as a salvage title. A salvage title indicates that the vehicle is not roadworthy and cannot legally be driven or insured.
Now, what about buying a car with a salvage title? Is that even an option?
As a matter of fact, it is! But first you’ll need to identify which vehicles have salvage titles in the first place.
Checking a Vehicle for a Salvage Title
Usually, the most accurate way to check whether a vehicle has a standard title or a salvage title is to pull a report on the vehicle’s history. These vehicle history reports are usually available from sources such as CarFax and AutoCheck, which may come with a small fee for each search but will alert you if the vehicle has had a salvage title at any point in its history. If it has, even if its title isn’t currently a salvage title, it means that the vehicle was at one point deemed a total loss but has since been ‘rebuilt.’
A restored title means that the vehicle was a salvage vehicle which was then repaired, inspected by the state vehicle authority, and re-registered. It does not signify that the vehicle is ‘good as new,’ only that the vehicle has been repaired to the point that it satisfies safety regulations and is road legal.
If you’re considering buying a car with a salvage title, you’ll want to be especially wary. It’s not for everyone.
Salvage Title Car Buying Tips
Buying a car with a salvage title has its advantages and disadvantages. On one hand, these vehicles are dramatically less expensive than their non-salvage title counterparts. If you’re a mechanic capable of repairing a vehicle itself at a relatively low cost, you may be able to ‘flip’ the car and turn it into a functioning vehicle for far less than market value.
That said, salvage title vehicles— even ones that have since received a restored title— can have mechanical issues, may be difficult to insure, and can have hidden problems lurking beneath the hood.
With that in mind, here are 8 top tips for buying a car with a salvage title.
- When Not to Buy
All vehicles that currently have a salvage title should be considered unsafe to drive until proper repairs can be completed. So when do you know when to buy and when not to buy?
The number-one biggest indicator that you should run, not walk, from a salvage title car deal is if the owner or seller is being dishonest or less than forthcoming. If the vehicle is being marketed as a salvage title vehicle and the owner is completely up-front about the damage it’s received, the parts it will need, and the extent of the repairs necessary to make it street legal, then you’re off to a good start. But if you have to discover that a vehicle is a salvage title car for yourself because the seller didn’t offer that information to you, then you should stay far away. If they’re comfortable hiding something that significant from buyers, there’s no telling what other information about the vehicle they may be hiding.
We also recommend avoiding salvage vehicles if you’re relatively inexperienced with cars and don’t know the general extent of repairs they’ll require. We’re not saying you should be trained and equipped to do the repairs yourself, but you should be able to at least generally assess the vehicle’s condition before buying. Otherwise, how will you know if you’re getting value out of the purchase?
- When to Consider Buying
You may want to consider buying a salvage title if you feel confident that you’ll be able to perform the repairs necessary at a relatively low price, if the vehicle is being sold at a genuinely good value, and you feel confident in the honesty of the party selling the vehicle. It should also inspire some confidence if you’re able to get a pre-purchase inspection from an authorized third party.
Keep in mind, traditionally available options such as financing or optional insurance coverages may not be readily available to you if you buy a salvage vehicle over a standard vehicle.
- What is a Rebuilt Title?
A rebuilt title is a title assigned to a vehicle that was designated as a salvage vehicle but has since been repaired, inspected, and re-titled with the designation of being street legal. Basically, it means the vehicle has been repaired to at least the bare minimum necessary to pass certain safety inspections and get back on the road.
Remember— a rebuilt title does not mean that, say, the 2015 Toyota Camry in front of you is every bit as good as a 2015 Toyota Camry with a standard, original title. Rebuilt titles only mean that the vehicle has been repaired to drive-ability, not to be as good as its equivalent. It could be repaired with aftermarket parts, a lower quality engine, etc.
- Buying ‘As-Is’
Buying a vehicle as-is means that you won’t receive any warranty and you can’t return the vehicle if it experiences problems, even if it’s within a day of driving it off the lot or away from the point of sale. You should always be cautious when buying any vehicle ‘as-is,’ but this status is essentially the de facto type of sale when it comes to salvage titles. Just tread carefully.
- Can a Salvage Title Be Turned into a Clean Title?
Some people wonder whether a vehicle with a salvage title can be repaired and renewed so perfectly that its title can be returned to a completely clean title, as if the salvage title never existed. The answer is no, it cannot. Once a vehicle has had a salvage title, its title can be rebuilt, but never completely ‘wiped clean.’ That means that no seller can ‘hide’ the fact that their vehicle was once a salvage title vehicle and has since been assigned a rebuilt title.
- Are All Cars with Salvage Titles Unsafe?
By definition, a car that currently has a salvage title assigned to it is unsafe— it means the vehicle can’t be driven without certain repairs. But that doesn’t mean that a salvage title vehicle can’t be repaired to the point of being a safe vehicle once again— it’s a matter of experience, skill, and awareness of what a vehicle needs to become safe for driving.
- What’s the Difference Between a Salvage Title and a Rebuilt Title?
A rebuilt title comes when a salvage title vehicle has been repaired, inspected, passed, and re-titled as a street-legal vehicle again. A salvage title simply means the vehicle can’t be driven without significant repairs.
- What to Check for in a Used Salvage/Rebuilt Title Car
If you’re considering buying a car with a salvage title, here are some key things to watch out for when shopping.
Accident History
The salvage title alone lets you know that the vehicle has had at least once serious accident. Look into the accident history in detail to learn more about the vehicle’s past and exactly what you’re taking on before buying a car with a salvage title.
Repair Record
If a seller is claiming they’ve repaired the vehicle all or part of the way to driveability, ask to see records. They should be able to produce parts orders, repair records, and more— after all, they’ll be legally required in most states before you can pass an inspection for a rebuilt title.
Exterior Damage
Exterior damage lowers the value of a vehicle, even if structural and mechanical issues are all repaired. Watch out for severe exterior damage, as it may also be a sign of a more serious accident in the vehicle’s past that the seller may not be disclosing.
Independent Inspection
Always, always, always get a second opinion before purchasing a salvage title vehicle. If the seller insists that you don’t need one, then it’s time to walk away from the deal.
Conclusion
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