Cars with a salvage title have been declared a total loss by insurance companies and are prohibited from being driven on the road. The biggest reason why people are hesitant when buying or bidding on salvage cars online because they think it is not possible to get insurance coverage for these cars.
However, there is hope. A car with a salvage title cannot be insured; however, if it is rebuilt, that’s a whole different story.
What is a Salvage Title?
A salvage title is given to a car when it is deemed a “total loss.” This means it is different from a “clean title,” which is given to cars that have never suffered extensive damage, had their odometer rolled back or known to have a serious mechanical defect.
An insurance company will deem a car a total loss if the damage is so significant that having the car repaired will cost more than a certain percentage of the car’s actual value, typically between 60 to 90% of the car’s value.
This kind of car will be given a salvage certificate and cannot be registered or driven.
Where to Buy Salvage Cars?
The best place to find these types of salvage car are auto auctions, both live and online, that occur all throughout the country. These auctions offer a huge inventory of salvage cars at very affordable prices.
For live auctions, you need a special permit or documentation to attend and take part in the bidding process since they are not generally open to the public. However, if you go for an online auto auction, you will be able to access car inventory from a number of auctions at the same time.
This is because online auto auctions like RideSafely.com put up and allow you access to start bidding on salvage cars around the country.
Rebuilding Your Salvage Car
Once you have bought a car with a salvage title, you need to first figure out what is wrong with it so that you can rebuild it and it can be issued a rebuilt salvage title.
A rebuilt salvage title declares that the car that was previously deemed a salvage has now acquired the necessary qualifications to be driven on the road. There is nothing bad about a rebuilt car and many refurbished cars are constructed to a high standard. However, unless you are very familiar with a car’s mechanics, the quality of the rebuilt car can be difficult to determine.
An experienced mechanic should be able to help you understand if there are any major issues with the rebuilt car. Many such cars consist of a large number of refurbished parts which shouldn’t be an issue if the components are in good condition and nothing is missing.
Additionally, each state has its own requirement for a rebuilt salvage car, so it is important that all the necessary inspection has been done. Once your car gets the green light, you can get it registered. But the question remains whether or not you can insure it.
Can You Get Insurance On a Car With A Salvage Title?
You cannot insure a salvage car but you can insure a car with a rebuilt title. However, the process can be trickier than for cars with clean titles. You should also be prepared for higher insurance premiums and additional inspections.
Firstly, you may find that many insurance companies are reluctant to insure a rebuilt car since it was already written off once. However, if you show them that you passed the DMV inspection and have persuasive negotiation skills, some companies will be up to talking to you.
Getting a full coverage may be difficult since it is challenging to assign a value to a rebuilt title car. Most rebuilt cars have 20 to 40% lower value than clean cars so your insurance payout may also be low. The insurer may also not be able to determine whether the damage already existed or happened because of a particular incident, which will make it hard to get optional coverage like collision coverage.
Another big issue is safety concerns as refurbished salvage cars may retain some issues that could not be addressed during their reconstruction. This can lead to a safety risk on the road. This means your car is more likely to result in an insurance claim and the insurance company may order further inspections.
The premium on rebuilt cars is quite high. However, if you know how to negotiate, you may be successful in getting it lowered. Even though it may still be high, it will not bankrupt you.
Don’t be discouraged if you get rejected by some insurance companies. Shop around and you will find others that will be willing to give you coverage. Once you have found one that will give you insurance with a reasonable premium, you will need to get:
- A certified mechanic’s statement confirming the car is safe to go on the road.
- Extensive photos and videos of your car that can help insurers compare the condition of your car in case of damage and you came to make a claim.
- The car’s original repair estimate that will describe all the improvements made to the car and provide proof that the car has been repaired.
Insuring a salvage rebuilt car may be difficult but not impossible, so there is no need for you to step back and be left without a cheap set of wheels.