From the Blog
What is a Salvage Title and Should I Buy One?
In 2019, 4.7 million passenger cars were sold in the U.S. alone. If you’re one of the millions looking for a used vehicle, then you may come across a listing that contains “salvage title” in its description.
But what is a salvage title? Does this mean this deal is too good to be true?
A salvage title car or truck can be a great find. Unfortunately, it can also mean unexpected (read: expensive) issues. Keep reading for information and advice about salvage title cars and SUVs.
What Is a Salvage Title?
The term salvage title refers to a damaged and repaired vehicle going up for sale. Salvage vehicles can have histories of major collision damage, flooding, or just simply cosmetic flaws.
Why Sell a Salvage Title Car or Truck?
When a vehicle sustains damage that is greater than its value, an insurance company may declare it a total loss. Vehicle owners have a few options in total loss scenarios.
Many people take the insurance payment, choose not to repair, and sell the car for parts or scrap metal.
Others may opt to have it repaired, inspected, and resell it as a salvage title car. Dealerships may also pay to repair and sell the salvage title car or truck.
What Happened to The Salvage Title Vehicle?
Before you buy a salvage title vehicle, find out how it got its title first. This will determine whether or not you’re comfortable owning a previously damaged car or truck.
Natural disasters are the leading cause of total loss insurance labels on US cars and trucks. Hurricanes, earthquakes, tornadoes, hail storms, flooding, and fires can all result in significant vehicle damage.
Damage from collisions and accidents is also a common cause for salvage title car sales. Vandalism, crime, and/or theft are other common reasons cars or trucks get salvage title status.
Not every salvage title car and truck has sustained structural damage. Some salvage vehicles may have only sustained hail damage. If there’s enough hail damage to warrant a total loss, it will be noted as the sole reason for the car’s salvage title.
Is It Smart to Buy a Salvage Title Vehicle?
Salvage vehicles can be a great way to get the car or truck you want for a budget price. However, you should be careful before jumping straight in and buying one. Here are a few items in a guide to salvage title vehicle shopping.
Do Your Research
With a vehicle’s VIN number, you should be able to find out its history. Texas’ DMV has a great guide for finding vehicle histories.
Ask the seller how much he or she spent to repair the car or truck. This will give you an idea of what kind of investment they’ve put into the vehicle.
You can check their story against the salvage title car’s insurance company records. Those should be available to you directly through the insurance company upon request.
Confirm Legit Mechanical Work
Have a trusted, third-party mechanic look over the vehicle. This may cost you $50 to $100 but the investment is worth it. Without having an inspection, you could be caught paying much more in future repairs.
How can you tell if the salvage title car you want to buy has been properly fixed? By asking to see proof of the person who did the repairs. You may want to talk to the mechanic or shop yourself to verify the job has been done right.
Know the Law
Each state has its laws about registering salvage title vehicles. Texas requires salvage title vehicle sellers to be licensed. The Lone Star State has other guidelines for selling cars or trucks with salvage titles.
Some states also have lemon laws. It’s important to read the fine print and understand what is and isn’t covered. State laws won’t always protect you if something goes awry with your salvage title car purchase.
Report Red Flags
If you’ve decided to buy a salvage title vehicle, be on the lookout for the following red flags. If you suspect the seller isn’t on the up and up, report to the federal trade commission.
No Title History
If you aren’t able to look up the title history, don’t buy the vehicle. Lack of a title trail usually refers to a stolen car. No matter how cheap it is, you don’t want to be part of a theft scam.
Do certain areas have paint that doesn’t quite match? Are there obvious dent coverups? These things can indicate shoddy repair jobs. If the owner isn’t willing to repurpose the vehicle’s paint correctly, what else didn’t they do right?
Wonky Wheels, Damaged Doors, or Hood Unhinged
Check out the vehicle’s alignment. Make sure the doors open and close like they should. Check out the hood and make sure it also opens and closes correctly.
If these things don’t check out, there could be unrepaired frame damage. Unrepaired frames are often caused by collisions.
While it may be difficult to walk away from an amazing car deal, be prepared to do so with a salvage title. If it feels like a bad deal, it probably is. Don’t brush off feelings of apprehension you may have during a sale.
If you’re experiencing a hard sell attempt by a fast-talking salesperson, re-evaluate the situation. Nobody should make you feel pressured to buy a vehicle. Purchasing a car or truck is a major financial decision.
Take your time with this purchase. If someone is rushing you, drop the sale and start over somewhere else.
Ask all the questions you can think to ask before you buy a vehicle. Here are a few questions you may want to float past the seller(s).
- When did you buy this vehicle?
- Was it damaged when you bought it?
- How did the damage happen?
- When did the damage occur?
- Who repaired it?
- Who inspected it?
- Who is your insurance carrier?
- Why are you selling this instead of keeping it for yourself?
- What has been repaired?
- Have any damages not been repaired? Why?
- Has this been approved by the state?
If the salesperson/people can’t give you straight answers, you should move along to the next dealership.
The Insurance Factor
Some insurance companies do not have policies to cover salvage title vehicles. If you’re looking to secure insurance before you buy a car, be prepared to shop around a little.
Your policy will most likely require an inspection of the vehicle to make sure it’s in good condition. It’s also likely you will need to pay more for an insurance policy on a car or truck.
There could also be fewer coverage options for you with a salvage title vehicle. Some of these may include less coverage than you’d get on a vehicle with a traditional title.
Salvage Title Car? It’s a Tough (Re)Sell
Are you planning to run this car into the ground and sell it for parts when it dies? If so, you don’t need to worry about resale value.
If you’re planning to resell this vehicle down the road, expect some issues. Salvage title vehicles sell for 20% to 40% less than their clean title counterparts.
Some people may have no problem buying your car but others may be quite apprehensive about it. Remember the due diligence you put into buying the vehicle? Keep a record (receipts) of all repairs, oil changes, and other maintenance to show the next owner how well you cared for the car or truck.
Quick Guide to Salvage Title Car Purchases
Are salvage title cars a good buy? The answer depends on how much work you’re willing to put into the sale. If you’re in the market for a car, understand it will take more research than a car with a clean title.
First, do your research by looking up the title history. Next, check with the vehicle’s insurer to verify its history. If you’re satisfied with these results, you can continue your research by enlisting a trusted mechanic.
Ask the pros at the auto shop if everything checks out. Next, shop around for insurance. Keep in mind you may have to settle for less coverage at a greater cost.
Trust Your Auto Service Provider
What is a salvage title? Trust the pros at Hance’s Uptown Collision Center to help with all your questions and more. For almost 30 years, President Rob Mays has been passionate about all things automotive.
You can trust Rob and his team to give you honest advice and quality service. We have locations in Dallas and Plano. Schedule an appointment for repair or an estimate today. We look forward to working with you soon.