Are Salvaged Title Cars Worth It?

March 27, 2012

Unless you're a mechanically inclined car enthusiast, salvage title cars should be avoided. Assessing the potential of a salvage car takes experience.

When a salvaged title car deal is placed next to other used cars, you can see that you can sometimes save a bundle on one. But is a salvage title deal really a good one?

The Mystery Factor
The problem with a salvage title is that it can be really difficult to find out its history. Carfax and other checks will provide some information, but this only goes so far. There are a wide range of scenarios where a car can be branded as a salvage title. Some buyers who research the actual standards are amazed at how little damage it sometimes takes to mark a car with a salvage title. On the other hand, salvage vehicles can have extensive hidden damage to electrical systems and other parts from flooding, fire damage or other misfortunes, that a buyer will not always know about. Buying a salvage title vehicle is always a roll of the dice.

Insurance Difficulties
Some insurance companies will only cover salvage vehicles for larger premiums (based on safety and other concerns), and others will pay out hardly anything on claims because they think the vehicle has no value. In the end, a salvage vehicle is only a deal if the buyer has done his or her homework and holds the insurer to a reasonable agreement.

Resale Value
Salvage title cars are almost never a good deal for resale. That's because so many buyers are wary of purchases that can't be normally valued. Online Blue Book sites won't value salvage cars, because each one has a different history. Salvage title vehicles are also sometimes rebuilt with sub-par parts. All of this means buyers who want to get the most out of their salvage title cars will drive them until they are worn out.

Ways to Profit
Regardless of all of the above, there are some scenarios where a budget-minded individual can save on salvage title purchases. One way is to figure out insurance details up front, and get an insurer to cover the reduced value of the car in exchange for lower premiums. Another great way to save is to use a salvage vehicle for everyday commuting, while keeping those miles off of another new or highly valued vehicle. Keeping miles off of a vehicle is a significant investment in its future, as later on, the seller can get a great resale price based on low mileage for the model year.

Finding Gems in the Junkyard

If you're trying your luck at buying with a salvage title, most experts will tell you it's a risky business. You're probably trying to find a vehicle that you can drive for several years, not an investment for resale. Here are some basic tips for a better chance at beating the risks of salvage title sales.

  • Work the seller for information. Be aggressive about gathering information on how the car was wrecked, whether it was in a flood or collision, etc. This information is critical for evaluating possible damage to the electrical system and other car systems.
  • Do a test drive. While you are driving the vehicle, get into all gears and speeds. Listen for any sounds that may indicate extreme wear on systems.
  • Park and test. Park the vehicle in a clean area and make sure nothing is leaking. You'll be able to spot oil leaks, radiator fluid leaks, and more.
  • Talk to insurers. One of your biggest challenges will be getting the car or truck insured. Be looking at deals for getting coverage while thinking about buying.
  • Dig around. Visually observe all areas of the car including the trunk, under the hood, and under mats or upholstery. You may be able to see if there is any flood or fire damage that has been covered up.

These are only some of the most basic things you can do as a car shopper. Buying a salvage title is always a risk, but sometimes, bargains can be found. Always be mindful of the challenge of getting insurance and doing the most thorough inspection possible.

What to Watch for in a Salvaged Title Car Sale

Generally speaking, you should never pay more than 50% of an identical used car's value for the same type of salvage title vehicle—this includes any repair costs.

What to Watch for at the Auction
Most salvage titles vehicles are offered for sale at auctions. Insurance companies take these types of vehicles to auction to be sold to the highest bidder. Bidders at these auctions usually include mechanics, car dealers and car enthusiasts. Most salvage title auction shoppers are rather experienced, and know what to look for. Therefore, you should be knowledgeable as well.

One of the first things you should consider is the type of damage that the vehicle has suffered. Always look for collision damage only. Never consider vehicles that have been in a fire or have experienced water or significant electrical damage. These types of vehicles will be very expensive to repair and restore, and are almost never worth the investment.

Also, you should have a good idea of what it's going to cost to repair the vehicle if you're the highest and successful bidder. Therefore, if you're not experienced in estimating the price of body repairs and possible engine replacements, consider taking along someone that is. Even if you have to pay a modest fee as compensation for someone accompanying you, it may be money well spent.

Know When to Walk Away
When you are at the salvage title auction, never feel like you have to leave with something. It is always better to wait for the salvage title vehicle that makes the most sense for you. There will be other auctions and other salvage title vehicles available; therefore, be selective and choose the vehicle that will best fit your budget.

In addition, try to get as much information on the vehicles for sale as you can before the auction. Most auctions provide a listing of vehicles for sale. If they do, browse the listings early and note any vehicles that may be of particular interest to you. Then, use websites like CARFAX to get full history reports on the vehicle. Although you already know that it has a salvage title, these types of reports can give you more detailed information about how many owners the car has had and last actual known mileage. All of these facts can help you make a better informed decision when thinking of purchasing a salvage title vehicle.

Finding Salvage Title Cars for Sale

There are several sources for finding salvage title cars for sale. Salvage title vehicles can be found at local auctions, Internet websites as well as salvage yards or junkyards. A salvage title vehicle is a great way to save money, and finding one is not that difficult. Before you buy vehicle with a salvage title, you should know that you may need to do major repairs in order to get the vehicle to run properly. However, here's a quick guide to help you find salvage title cars:

Internet Searches
There are actually quite a few websites that help connect buyers to companies or brokers that sell salvage title vehicles. For example, websites like Salvage Direct offer vehicles with salvage titles for sale. You can search in your local area or search nationwide for salvage title cars that meet your search criteria.

Local Options
Keep a watchful eye on the classified ads in the local newspaper. If you live in a fairly populated area, chances are that there will be several salvage title car auctions in your area throughout the year. Also, you can check the Internet to search for a salvage title car auctions using your favorite search engine.

Other Sources
There may be many salvage title vehicles right in your area. Check your local yellow pages directory under junk dealers, salvage yards and towing services. These types of businesses generally will have junk cars and some of them may be salvage title vehicles. Visit these businesses and see if they have vehicles that you may be interested in.

Related Questions and Answers

Can a Repairable Salvage Car Get Rid of a Salvage Title?

With a repairable salvage car, you can get rid of a salvaged title and replace it with a rebuilt salvage designation. In some instances, vehicles that have been theft recoveries are labeled as totaled by the insurance companies; thus no damage. Furthermore, a group of vehicles may have been deemed a total loss because of storm damage without sustaining any actual damage. These vehicles are repairable, and the salvaged designation may be removed if there is proof that there was no or repairable damage. In addition, vehicles imported or exported to or from the United States are issued a clean title.

What are Salvage Car Breakers?

Salvage car breakers are businesses that skillfully dismantle junked or salvaged vehicles of all of their usable parts and sell them to the public and or to other such dealers. These businesses are also referred to as junkers, salvage yards, car breakers, or auto breakers. The term breaker is in reference to junk yards in the United Kingdom. Some of these breakers specialize in very specific brands or types of vehicles. For example, there are breakers that only handle BMWs, big trucks or motorcycles. The majority of breakers deal in a variety of vehicles and parts.

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