Salvage vehicles can be a great alternative to other types of used cars because of the excellent price. However, insurance companies are often not willing to provide them with coverage. Here’s what you need to know about the truth of these unique vehicles and why insurers are so opposed to them.
Cheap – But at a Price
Yes, it’s absolutely true that salvage vehicles can be very cheap at a car auction. This is because of how vehicles end up being classified as salvage – it requires a car to suffer anywhere from 60 percent to 90 percent of its total value in damage, either due to an accident, from an act of vandalism, or any other type of incident. These cars are then written off by their insurers (or “totaled”), and the owner is given a check in exchange for the vehicle. The insurer then re-titles the car as a “salvage” vehicle and tries to get rid of it as quickly as they can by offering it up for auction.
Once a car does get classified as a salvage vehicle, it can no longer be driven on the road. Any car with a salvage title can’t be registered at the department of motor vehicles, and it certainly can’t be insured either, so that means that if you do buy a salvage car it’s up to you to not only get it off the lot by having it towed or transported via flatbed.
If you can do the repairs yourself, you’ll obviously save a bundle on not having to pay for labor, but it means nights and weekends spent tinkering. However, if that’s your idea of a good time, go for it.
A Painstaking Process
You better check the specific laws governing rebuilding salvage cars in your state first. Every state in the United States has salvage vehicle laws, and while they may be largely the same they can and do differ in several substantive areas.
A good example of this is the state-mandated requirements for getting your salvage car back on the road. While most states require an official from the department of motor vehicles or the state police department to inspect a rebuilt salvage car, the documentation requirements for these inspections can vary wildly.
Most inspections will require you to provide the salvage certificate and bill of sale from when you bought the car at auction, and the majority of these will need receipts for any components you used to fix the car. However, more than a few states require you to take before and after pictures of your car from several angles, so make sure you check to see if your state requires this before you begin your repair work.
Insurance Companies Hate Salvage Cars
This inspection does nothing to help insurers feel better about providing coverage for a rebuilt salvage car. State inspections focus on legality and not drivability, so if you want to get your insurance company relaxed enough to provide adequate coverage to your vehicle, prepare yourself for yet another inspection – this time at the hands of an insurance agent instead.
This inspection is much more geared towards safety and drivability. The agent will take copious notes, snap photos inside and out of your vehicle, and report back to the insurer. If everything is good, you’ll be offered coverage that’s more than just the state minimum. This is one of the few ways to get comprehensive or collision insurance for a salvage vehicle.