What is Salvage title?

Is It Possible to Resell a Salvage Car that I Buy in a Dealer Auction Online?

By Mike Richards Updated: 05/22/2019 Posted: 08/07/2017

There’s no denying that the there are incredible deals to be had in dealer car auctions online. In trying to find those incredible deals, one’s attention will necessarily turn toward salvage vehicles. These cars can often be had for mere pennies on the dollar, presenting the auto buyer who’s not afraid of a little work with an incredible opportunity.

Still, salvage cars remain the subject of some skepticism among those who use online dealer car auctions. They wonder if a salvage car can every really become that valuable. Further, they worry about what their reselling prospects might be should they ever wish to unload the vehicle at a later date. Below, we’re going to explore this topic, explaining why ‘resale value’ shouldn’t be your primary concern with salvage cars.

Understanding the Quirks of Salvage Titles

To gain an understanding of salvage cars, one must first understand how a vehicle will come to be issued a salvage title. The most basic way of explaining it is this. A vehicle is issued a salvage title when its insurer pays out its policy at 75% or greater of the vehicles value. This percentage, it should be noted, varies from state to state.

Naturally, one’s first inclination is to believe that this happens when a vehicle has been ‘totaled’. Sure enough, a number of the salvage vehicles you’ll find in online dealer car auctions have been significantly damaged in accidents and collisions. But, this is not always the case. For example, a vehicle that has been stolen, its policy paid out and then recovered, will be issued a salvage title. This is regardless of the condition of the vehicle.

Salvage vehicles can be had through dealer auctions on the cheap for one primary reason. Once a car has been designated as salvage, it will always be marked as having been salvage. This necessarily depreciates the long-term resale value of the vehicle. But, is that the deal-breaker that it appears to be?

To Resell or not to Resell… That Is The Question!

The point of purchasing a salvage car is to get a roadworthy vehicle for an incredibly low price. When bidding on salvage cars, you’ll likely find that the final bid prices lag well behind what you might pay were you to bid on a similar used car.

This low price is then made up through post-purchase repairs. If you can find a salvage car that requires little in the way of repairs, then the potential for savings is tremendous. Even if there are significant repairs needed, though, if you’re able to provide the labor and parts yourself, then you’re definitely still coming out ahead.

In the end, then, salvage cars require an incredibly minimal upfront investment, especially as compared to new and used cars. Because of this, the vehicle’s resale value isn’t really all that important. You go the car for pennies on the dollar anyway, so why would it matter if it will never be valued the same way as a similar car that’s only used?