Should You Buy A Car With A Salvage Title?




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A car with a salvage title has undergone extensive damage (such as in an accident or flood), which usually means you can buy it for much less than market value. However, while saving money on a used car is appealing, you might want to think twice before buying a car with a salvage title.

Here’s what you should know about buying a car with a salvage title.

What Is a Salvage Title?

A salvage title is assigned to a vehicle whose extensive damage and cost of repairs hover around, or is in excess of, the actual value of the vehicle. This kind of title is a type of “branded title,” which indicates the vehicle suffered damage that both the owner and potential buyer should be aware of. A branded title could also be marked as “rebuilt”—meaning the salvaged car was rebuilt and qualified for registration and licensing after passing an inspection.

It isn’t always obvious if a car has been damaged, which is why many states mandate that the seller of a car with a salvage title must disclose this information. However, not every state has these laws, so it’s important to get familiar with your state’s requirements before you go car shopping.

Also, keep in mind that requirements to get a salvage title can vary by state. For example, in New York and many other states, a vehicle’s title will be branded as salvage if the total repair costs amount to 75% or more of the car’s market value. But some states like Florida will assign a salvage title if the vehicle is deemed a total loss by the insurance company.

How to Buy a Car With a Salvage Title

If you decide to buy a car with a salvage title, follow these four steps:

  1. Get a full inspection. Before buying a car with a salvage title, make sure to have it inspected by a mechanic you trust—don’t just rely on the owner’s description of the vehicle’s current condition. This way, you’ll know what sort of damage you might be dealing with if you purchase the car.
  2. Check the car’s history. Double-check what led to the vehicle being assigned a salvage title. You can visit the National Motor Vehicle Title Information System (NMVTIS) to get a car history report from one of its data providers. Also, be sure to ask the seller for receipts and estimates for the repairs, or contact the body shop that performed the work.
  3. See when the salvage title was issued. A car that received a salvage title years ago but that has been dependably driven in the time since is generally a more certain bet compared to a vehicle that was damaged more recently.
  4. Consider your financing options. Lenders typically see cars with salvage titles as very risky investments, which could make it difficult to get a loan for this kind of vehicle. You might have an easier time securing a loan for a salvage-title car if you have a good relationship with your bank or credit union and have good to excellent credit. Or you could consider taking out a personal loan that doesn’t require collateral.

Should I Buy a Salvage-title Car?

Typically, no—these kinds of vehicles come with several major risks that you shouldn’t ignore. But in some cases, buying a salvage-title car could make sense—though you’ll have to do a deep dive into the vehicle’s history first to see if it’s actually a good deal or not.

For example, say you’re interested in a car that has a clean history with two past owners, no accidents and comprehensive maintenance records. But after the second trade-in, it was exposed to a hail storm on the dealer lot and was declared a total loss, despite having no damage under the hood or to the interior. If you can live with the dings to the car’s body and maybe get some of them repaired, you may have found a great money-saving deal.

Or say that a vehicle that was stolen, reported stolen to the police and recovered within 24 hours before any parts were stripped. While the vehicle will likely be issued a salvage title by the state because of the theft, it could still be worth buying as the car sustained no damage.

But outside of these unusual sorts of circumstances, it’s likely better to consider other used cars with clean titles to avoid the risks.

Pros and Cons of Buying a Salvage-title Car

If you’re thinking about buying a car with a salvage title, there are some pros and cons to consider.

Pros of Buying a Salvage-title Car

  • You can save money. You can typically buy a car with salvage titles for 20% to 40% less than market value compared to a vehicle with a clean title.
  • You might find a car with little damage. A salvage title doesn’t always mean that the car has been wrecked. For example, you might find a heavily discounted salvage-title vehicle that was stolen and recovered before being stripped for parts or that only suffered slight cosmetic damage. Even if the car needs some minor repairs, it might end up costing you far less to fix than what you would have spent on another vehicle.
  • The vehicle could be used for parts. If you’re restoring a vehicle that needs hard-to-find, expensive parts, then buying a car with a salvage title with the parts you need could be worth it. Or you might decide to fix up the salvage-title car itself.

Cons of Buying a Salvage-title car

  • The car could have extensive damage or not be safe. It can be hard to judge how much damage you’re actually dealing with just by looking at a car—which means you could end up needing to spend much more on repairs than you initially expected. There have also been reports of lawsuits over car repair shops cutting corners when it comes to vehicle safety.
  • A risk of fraud. Unfortunately, sellers don’t always tell the truth about the damage that led to a salvage title. If you purchase the car and it needs major repairs, you’ll have little recourse.
  • It’s hard to qualify for insurance or financing. Insurance companies typically offer limited coverage for salvage-title cars—and sometimes don’t provide coverage at all. It can also be difficult to find a bank or credit union willing to offer a loan for a car with a salvage title.

Can You Get Insurance on a Car With a Salvage Title?

As a car with a salvage title isn’t considered roadworthy, you typically won’t be able to get insurance unless the vehicle is rebuilt and passes safety inspections. But even then, many car insurance companies don’t provide coverage for cars with rebuilt titles.

If a company does offer insurance for this kind of car, it is usually only liability coverage that won’t cover the cost of damage to the salvage vehicle if there’s an accident.

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The Bottom Line

While buying a car with a salvage title could save you money, it comes with several risks that could far outweigh the benefits. If you’re thinking about purchasing a salvage-title vehicle, make sure to do your research to fully understand exactly why the car has a salvage title and what repairs it will need to be considered safe and roadworthy.

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