Pros and Cons of Buying a Salvage Title Car

Salvage title cars don’t always mean that the car is totaled and beyond roadworthy

With the cost of living so expensive these days, virtually everyone is looking for more ways to save more money. One trend is the increasing popularity of salvage title cars, which can be bought for extremely low prices at auctions.

Contrary to popular belief, salvage title cars don’t always mean that the car is totaled and beyond roadworthy; categories of vehicles with salvage title also include theft or disaster recovery, which may require little or no repairs done.

If you are in the market for cheap cars, it is important to consider the pros and cons of buying a salvage title car so that you know the risks and can make a better, more informed decision with your money.

Pros: The Low Cost, The Possible High Value, Spare Parts, The Profit Motive. The Range of Selection, Possibility of Better Value.

The Low Cost
This is the most obvious advantage of buying a salvage title. Compared to their clear-titled counterparts, salvage-titled cars are sold for much lesser at an auction. You can save a whole lot of money by opting to buy a salvage vehicle. Even a virtually intact and fully functioning car with a salvage title will be sold at no more than 75% of the market value of its clear-titled counterpart. Most salvage titled cars are sold for even less.

When you can’t afford (or want) to avoid damaging your new expensive car on grueling or risky trips, a salvage title car can be a good, prudent substitute option for rides in such situations. Even buying fully totaled ones that are beyond repair can be an economical decision as you can get a spare part or two, which might have cost you a fortune if you opted for buying it at retail value.
The Possible High Value
With salvage titles, there is always the chance that you might get lucky with your purchase and land yourself a fully road-worthy vehicle requiring little to no work from your side. While most cars that are branded as salvage titles tend to be extensively damaged, a lot of intact cars can also end up with the title.

Such examples include theft-recovery cars that were recovered by the insurance company after they had provided a replacement car for the original owner. Another instance could be that of a car that the insurance company agreed to total as part of a larger settlement.

Or, it could also be a case of the insurance company finding it too much of an effort to properly inspect a vehicle for damage and seeing it as less of a hassle to auction it off and find the owner a replacement. Such instances are usually common after disasters when insurance companies are quickly overwhelmed by the number of cases they have to handle.
Spare Parts
Another major reason why people tend to buy salvage title cars is that such vehicles can be a ‘treasure trove’ of spare parts which you can sell on the market for a nice profit, or use them for your own needs and get your repairs done inexpensively.
The Profit Motive
Aside from just selling spare parts, another way you can profit off buying salvage title cars is to make them roadworthy again and acquire them a clean title so you can resell it at its market value. Depending on how much the repairs cost and how much you were able to haggle on the price for the salvage title car, a nice profit of a few grand is possible.

Cons: Insurance Issues, The Hidden Costs, A Salvage Title is Forever.

Insurance Issues
Many insurance companies may be unwilling to provide coverage for a car with a salvage title. This is because in case of an accident occurring, it would be difficult for them to determine whether specific damage was caused in the accident or was already present within the car that may have led to it being rebranded as a salvage title in the first place.

For the few insurance companies that would agree to cover your salvage title car, the insurance provided would usually be limited, with the insurer willing to pay only as much as 80% of the car’s market value.

Plus, the insurance company would also deem your salvage title car to have a far higher probability of breaking down or getting involved in an accident because of its title. Therefore, the premiums they may charge to insure your car would be exorbitant.

Because of this, it is recommended that you shop around for insurance companies and be aware of the prices they will be charging on a salvage title before you consider investing in one.
The Hidden Costs
A salvage title car may look perfectly fine and intact on the outside, but on the inside it could be hiding a ton of extensive damage and troubles that would cost you a fortune to repair. Even worse is that it can be really hard to thoroughly assess the extent of damage a salvage title may have. For example, a salvage title car recovered from a flood may look and run completely alright, but there could be serious issues with the electronics or inlets that you won’t notice until you have already purchased the car.

It doesn’t help either that on auction, salvage title cars are sold as seen, meaning that you are not given the opportunity to test drive the vehicle and see where the performance is lacking. Since damages can often not be easily detected, it does make salvage title cars a risky buy.

However, some of the risks can be mitigated by bringing along with you an expert mechanic who would be better able to assess the damages on a specific salvage title car properly.
A Salvage Title is Forever
Even after you have done all the repairs and made your car road-worthy again, it doesn’t mean that the title would disappear off of the vehicle. Previously salvage-title cars that are inspected and approved by the DMV for use on roads are rebranded as ‘rebuilt’ titles.

However, everyone would still know the car’s title history. While a rebuilt title commands a higher price, it would always be lower compared to its counterpart with clean title history, regardless of how much effort, time, and money you spent on repairing the car.

Concluding Note

Are salvage-titled cars worth the money? That can depend a lot on how good you are at spotting the potential costs on the vehicle, the time and effort you are willing to put into it to make it roadworthy, and how comfortable you are in owning a car that may be far from perfect as far as performance goes. You may get lucky and land yourself a car that only would require a visit to the DMV to get a change of title. But be aware, the chances of finding such rare specimens are extremely low. However, if you know where to look and what to look for, the odds can be more in your favor.

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