salvage car
Salvage Cars

7 Reasons Not to Buy a Salvage Car 

By Mike Richards Updated: 08/27/2017 Posted: 10/23/2015

There are a number of reasons why you should seriously consider buying a salvage car, but probably an equal number of reasons why you shouldn’t. So, if you’ve found what you think is the perfect car, but it has a salvage title, keep in mind that when it comes to these vehicles, it’s very much “buyer beware”. So, why should you avoid a salvage car? Here are five good reasons.

#1. It’s a Salvage Car

That probably sounds like a circular argument – you shouldn’t buy a salvage car because it’s a salvage car. But think about this: you really can’t tell, a lot of the time, what you’re getting with a salvage car. The mileage might be low, and the photos might look great, but you have to know that there’s a reason why this car was sold for salvage.

In some cases, salvage cars have suffered little to no damage. Some of them might even be stolen cars that were only recovered after they had been declared a total loss by the insurance company.

In most cases, though, a car is declared as salvage by the insurance company because it has sustained damage that would cost more to repair than the vehicle is actually worth. This doesn’t necessarily mean that the damage was severe, as older or less valuable cars might be declared as salvage even if they sustained relatively minor damage.

But in many cases, the damage was serious, and might not always be evident. The seller might assure you that the damage is just cosmetic, but you don’t know that for sure, and realistically, that’s probably what every seller is going to tell you about every salvage vehicle. Unless you can actually examine the car, you won’t be able to tell for sure how extensive the damage is.

#2. You’ll Have Trouble Insuring It

When a car is sold as salvage, it’s because it’s been in an accident, damaged in an extreme weather event, or best-case scenario, it’s been stolen and recovered. Again, the issue is whether or not you can examine the car. Some types of damage are easy to assess – if the car smells like a sewer, you can probably assume that it’s flood damaged.

On the other hand, a stolen car could look just fine, but the thieves could have revved the engine hard, over and over, possibly overheating it and causing irreparable damage to the valves and cylinders. Many types of damage can result in an insurance company declaring a vehicle “totaled” and sending it off to auction, where you can buy it at your own risk.

Understandably, insurance companies don’t want to take a chance on a car that’s already been totaled.  What that means is that you’re going to have to fix up the car to their satisfaction, and that can entail a rigorous examination to ensure that the car is roadworthy. You may find that you can only get PLPD insurance on your rebuilt salvage vehicle, or that the premiums, even if you can prove that the car is drivable, will be very high for comprehensive and collision.

#3. You Can’t Finance It

No bank or lender is going to loan you money to buy a salvage vehicle at the same rates you’d pay for a purchase of a new or gently-used vehicle. At best, you might qualify for a personal loan at a higher interest rate.

#4. You’re Taking a Chance With Your Safety

Simply stated, salvage cars can be dangerous. In many cases, a rebuilder may have cut corners on things that might not be detected in an inspection. There’s no reliable way, for instance, to know if an airbag works unless you’re in a collision. Then it either deploys or it doesn’t, and that’s how you know if it was in working order. Dishonest rebuilders will do whatever they can to lower their cost of rebuilding in order to make more profit on a salvage car.

#5. Your Car Will Have Little, if Any, Resale Value

A salvage car, generally speaking, is going to be worth a lot less than one who does not have a salvage title. It’s so hard to estimate the resale value on a salvage vehicle that the Kelley Blue Book doesn’t even price them. There are simply too many unknowns. The upside to that is that if you’re buying a salvage car, you should expect a huge discount off the Blue Book price.

#6. You Own It Forever

Think about what happens when you try to sell a salvage car. You tell your potential buyer that the car as bought as salvage, he or she will assume that the car was damaged when you bought it and that there is no way to know in what condition the car really is. This reduces your pool of potential buyers substantially.

#7. The Potential for Fraud

You could actually already be driving a salvage car. Requirements for licensing a car in one state can be different from those in another state. A car that is titled as salvage in one state could conceivably be driven to another state where an MVI isn’t required, and a clean title can be issued. This raises the value of a car by quite a bit – thousands of dollars, usually. So it’s well worthwhile for a disreputable rebuilder to cross state lines to get a new title.

Insurance companies have also been known to take advantage of loopholes like this. In fact, in 2006, State Farm admitted to selling somewhere between thirty and fifty thousand vehicles that had been totaled – without salvage titles.

Still Want a Salvage Car?

Now that we’ve told you all the reasons that you shouldn’t buy a salvage car, we have to tell you that if you play your cards carefully, you can actually get a really good deal on a salvage vehicle. But there are a few things you should do.

  • Have a mechanic check out the car. Do this especially if it seems like you’re getting a really good deal. Much can be hidden when it comes to a salvage car.
  • Get a vehicle history from a company like Autocheck or Carfax. These reports won’t necessarily tell you everything that’s wrong with the car, but they should at least tell you if it’s a salvage vehicle.
  • Check with the DMV to find out what the laws are in your state regarding salvage vehicles. The laws vary from state to state.
  • Run the VIN through the National Motor Vehicle Title Information System. Not all states participate, but if your state does, it could help protect you against title fraud.
  • Talk to your insurance agent and find out what type of coverage you can get for your salvage car.

Conclusion

A salvage car isn’t always a bad deal. But it’s buyer beware, and if you’re smart, you’ll take advantage of all the ways and means at your disposal to determine the type of damage the car may have incurred, and the likelihood of getting it roadworthy and insured.

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