Short on cash? Need a ride for a specific purpose but you don’t want to lease or rent? Perhaps you simply want to know the deal with cars sporting a salvage title tag, and factors that come together to make this type of car worth buying? Or, maybe, you are concerned about your environmental footprint. (Recycled cars reduce demand, which further reduces production pollution.)
Purchasing a used car with a salvage title is considerably cheaper than buying one with a clean title. But first, do your due diligence to find out if this move will be worth it for you. Therefore, before pulling the trigger on that purchase, here is what you should know.
What are salvage titles anyway?
A salvage title is a certificate or designation for cars when they are involved in an accident and the cost to repair would exceed the value of the car. Insurance companies issue salvage titles when a repair would exceed 50 to 90 percent of its value before the accident occurred. After issuing the salvage title to a car, the insurance company then sells it to a salvage yard. The salvage yard or repair facility rebuilds the car, or salvages it for parts.
Take note that not all salvage titles are issued due to damage from a collision. Other cases where a salvage title may be issued include fire damage, flood damage, or hail damage.
How to spot a car with a salvage title?
Most states have requirements that dictate title notifications as stickers on cars or as a line item on a title. Nevertheless, some states have few requirements about informing possible owners about the vehicle’s history.
Yes, you do need to be concerned about “title washing.” Title washing is a practice where unscrupulous car dealers try to hide a car’s history. They do this by selling the car in a state with less stringent title requirements. To protect yourself from becoming a victim, experts recommend the following two options: Either get a vehicle history from AutoCheck or get a vehicle report from Carfax.
What you should know about insurance of a salvaged vehicle.
Thought you had difficulty with your previous car’s insurance payments? Getting insurance for a car with a salvage title will not be any easier. In fact, it is almost guaranteed to be a challenge. Here’s why. Most insurance companies steer clear of vehicles with a salvage title because they cannot be sure of how well the car will hold up in an accident. States differ in car insurance requirements, and the penalties for driving a car without car insurance varies from state to state. Some states allow you to drive legally without insurance; however, there is typically a financial threshold that must be met.
Before purchasing a car with a salvage title, first secure auto insurance before forking out your cash, unless you do not plan to drive the salvaged vehicle and only want to harvest it for parts.
Here is how much you should pay for your salvaged car.
The typical price tag for a rebuilt car with a salvage title is about 60 percent of the price a car with the same make and model plus a clean title would bring in. If your used car dealer is asking for under 60 percent, then you know you are getting a good deal.
Don’t forget: Get the prospective car inspected.
You will need to fork out money for this inspection. But in the case of cars with salvage titles, do not risk missing this step. Spending money here could save you heartache and money down the line. Look for a repair shop that provides pre-purchase car inspections – preferably, a repair shop that is not associated with the car dealership selling you your vehicle.
If possible, use a repair shop that you plan to continue to use in the future. This way, they will be familiar with your car and its history.
Article Submitted By Community Writer