The short answer to this question is both yes and no. Salvage cars are the ultimate fixer-uppers, and if you don’t have the skill to deal with the damage, it may not be worth your while to have someone else fix up a salvage vehicle for you.
That said, sometimes you can get a great deal on a salvage car at auction, but it’s buyer beware. You can’t return the vehicle if you’re not happy, so if you’re considering going this route, you should make sure that you have someone with you who can assess the vehicle and let you know exactly what you’re getting into.
On the other hand, if you’re mechanically inclined, a salvage car could be a great restoration project.
Let’s talk about some of the problems and pitfalls of buying a salvage vehicle.
#1. The History of the Car
One of the biggest problems with buying a salvage vehicle is that it can be hard to determine its history. Sure, you can do a Carfax check, and you’ll get some information, but it’s only going to go so far.
There are any number of reasons why a car might be designated as salvage. Sometimes, it doesn’t take much damage. Other times, the damage can be extensive and hidden. For instance, the car could have been in a flood and have sustained significant damage to the electrical system. You won’t always see this kind of damage, but once you start up the car, you’ll realize quite quickly that there’s much to be desired.
#2. Insurance Problems
Some insurance companies won’t cover a salvage car with anything more than basic public liability and property damage coverage. If you want comprehensive and collision insurance, you’re likely going to have to submit to a motor vehicle inspection, either by the police or by an inspector appointed by the insurance company.
This is simply because an insurance company is reluctant to provide coverage for a vehicle that has already been totaled. It’s a bad risk. If you are able to get comprehensive and collision on a salvage car, you should expect to pay a high premium. Of course, if you’ve gotten the vehicle for little or nothing, and the repairs haven’t broken the bank, it may be worth your while to accept the higher premium. After all, you’re considering your overall cost of driving.
#3. Resale Value
Buyers are typically wary of salvage title vehicles. They assume that they’ve been rebuilt with substandard parts, and an additional problem is that it’s impossible to get a Kelley Blue Book valuation on a salvage car. So if you’re buying a salvage car with the idea of rebuilding it and selling it, it’s probably not the best idea. On the other hand, if you’re planning on rebuilding it and then driving it yourself, that’s a whole other matter.
When is a Salvage Car a Good Deal?
You can save money by fixing up and driving a salvage car. Figure out all the insurance details beforehand, though. Think about using your salvage car for “everyday” use and retaining your higher-valued car for road trips. This reduces the mileage on the more valuable car and increases its resale value.
Never pay more than half the value of a comparable, undamaged car for a salvage vehicle, and include repair costs in that valuation.
Also, consider buying your salvage car at auction instead of from a dealer. And when you buy, consider carefully the level of damage. Avoid vehicles that have sustained a lot of water or fire damage. They’ll be incredibly expensive to restore, and are hardly ever worth the investment.
Think carefully about what it will cost to restore the vehicle. If you’re not the best at estimating the cost of repairs, take someone with you who is. Even if you have to pay a mechanic a small fee to accompany you to the auction and assess the car you’re thinking of bidding on, it can be a good investment.
Remember that You Don’t Have to Buy
Whether you’re buying at an in-person auction, or an online auction, remember that you don’t have to walk away with a vehicle today. You can wait until you find the car that’s right for you. There will always be another auction.
The Final Word
If you’re cautious, don’t get caught up in the excitement of bidding or buying, and remember the pitfalls of buying a salvage vehicle, you could end up with a good deal. Just be sure that you make an informed decision so that you don’t end up spending more in repairs and insurance that the vehicle is really worth, and you could save a lot of money buying a salvage car.