The Risks of Buying Salvage Title Vehicles

Today’s used car market has remained brisk in recent years due primarily to our anemic economy. Many new vehicle buyers have turned to purchasing used vehicles because of their lower initial cost.

RisksCurrent owners, instead of trading, have decided to repair and keep what they have, including vehicles with ‘Salvage Titles’. Many are selling these ‘Rebuilt’ Salvage cars privately, instead of turning them into their insurance company. Problem is, some of these private sellers do not disclose to the buyer that their vehicle has a ‘Salvage’ or ‘Rebuilt’ salvage title.

The Low Price Alarm

Have you ever wondered why a particular vehicle seems like its priced way below other similar year, make and model vehicles? Remember what mom said, “If it seems too good to be true, it probably is!”

Vehicles with a murky past are worth much less than vehicles with clean titles. If a vehicle is priced way below similar vehicles, the red flag in your brain should go up. So, before you buy, you’ll need to do your homework and do some research. You can order a vehicle history report at Carfax or Autocheck, however keep in mind that many US states don’t submit accident reports to the Central National Motor Vehicle Title Information System. Because of this, the accuracy of these reports can sometimes be flawed.

The Risks

So, after some investigation, you find out that the vehicle listed for sale is a “Salvage Title Vehicle”, or “Rebuilt” Salvage vehicle. Keep digging and keep asking questions. For example, ask the seller for the details as to where the damage occurred. Does the airbag need to be replaced? Was there any frame damage? Who made the repairs for them?

Ask to see their service, repair and parts records they compiled while rebuilding the vehicle. They’ll have these, because they needed them to get the vehicle inspected. Then, ask the seller if you can have the vehicle inspected.  Make arrangement at an auto body repair shop that employs certified frame technicians. They can inspect the repairs, check the frame for damage or stress and give you a professional assessment as to the quality of repairs.

After all your questions are answered to your satisfaction and you learn that the vehicle was repaired properly and is road worthy, then begin asking yourself these questions:

  • Do I realize, that if I buy this car, it will be very difficult for me to sell or trade it later on?
  • Do I understand that the Salvage Branding will stay on this car title for life?
  • Am I ok with the fact that this car will never be worth what similar year, make and model cars are worth?

If you’re going to drive it until, as they say “the wheels fall off” then the risks and the savings might be worth it. Just keep in mind that there will be far less buyers out there willing to take a chance on buying your salvage vehicle.

If you like buying a car every 3 to 4 years, a rebuilt salvage car may not be for you. However, if you are looking for a car priced 30% to 40% lower than comparable vehicles and don’t mind doing all the research and inspections, this might be the way to go. After all, a car is just transportation, a way to get back and forth to work, or serve as a second car for the family.

Getting an Insurance

Before you sign on the dotted line, you might want to call your current insurance carrier. You may find out that they won’t cover a vehicle with a previous salvage title. You may have to call around for other options on coverage. There are companies out there that will cover this type of vehicle. However, you will probably only be able to get liability coverage. You will most likely not be able to obtain full coverage, or comprehensive and collision, unless the vehicle is a true classic car and can be appraised by the insurance company or someone they hire.

You will generally find that the cost of liability insurance on a salvage title vehicle will run about the same as any other vehicle, based on your driving history. You can make this a fairly easy step by shopping for insurance online. Take advantage of the many free quote services that are out there today.