What is Salvage title? Buyer Tips

Salvage Cars for Sale: 5 Signs You Shouldn’t Buy a Salvage Car

By Mike Richards Updated: 07/27/2022 Posted: 04/13/2017

Salvage cars for sale are available on dozens of sites, and at thousands of locations across the globe. For the right buyer, these cars can be a safe and affordable bet. They’re not right for everyone.

A car with a salvage title is a car that has been usually damaged. In most cases, the car has been declared a total loss—totaled—by the insurance company. These cars are usually at least 5% below market value, and often significantly below market value. But that lower price comes with a trade-off: the car is often significantly damaged, and it can be tough to determine whether the damage is superficial or structural. Sometimes cars are salvaged for reasons as superficial as a hailstorm or a lot of scratching on an expensive vehicle. Other times, the damage is due to dangerous defects in the frame that may not be apparent with a few cosmetic fixes.

Here are five signs that a salvage car for sale is not the right choice for you.


1. This is Your First Car Purchase, and You’re Not Financially Savvy

There’s no rule, of course, that you have to be an experienced car buyer to purchase a salvage vehicle. But it certainly helps. Buying a car from a dealer is complicated enough, from dealing with tax, tag, and title issues to addressing issues of financing. Unless you have a financially savvy person advising you and are willing to do a significant amount of research, don’t make a salvage car your first vehicle investment.


2. You Can’t Pay for the Car or its Insurance

Financing can be challenging to get with a salvage car. So if you can’t afford to pay in cash, consider going elsewhere. One of the primary benefits of a salvage car is that you can often buy one without going into debt. Taking on debt to pay for a salvage car is a hefty risk because if the car does not outlive the loan, you’ll be stuck owing debt on a car you no longer possess. And unlike a new or used car from a dealer, you can’t trade in the car to pay off the loan. Avoid this at all costs.

Even if you opt to get financing and the car survives, there’s another issue: many banks won’t finance a salvage car purchase. That means you need to make certain you have financing before you waste time and energy searching for the perfect salvage vehicle.

Insurance is another concern. Insuring a salvage vehicle is complicated, and not all providers will be willing to insure such a car. Some demand very high premiums. Before you invest in a salvage car, explore your insurance options so that you’re not left with a car you cannot legally drive.


3. You Want an Investment

A salvage car is a lot of things: An affordable and accessible starter vehicle for a teenager, a beater car to drive until you can get a better car, or a project to fix up in your driveway on weekends. It’s also an opportunity for access spare parts, and to switch them out between one or more vehicles.

In most cases, it is not an investment. A salvage car is unlikely to increase in value. Even if you fix it up, make it safe, and make it beautiful, prospective buyers will be reluctant to bite. Don’t buy a salvage car if you want an investment car. Better to buy a used car you can fix up, than sink a ton of money into a car that may never be sellable.


4. You Have Serious Safety Concerns

Salvage cars require a lot of research to ensure they are safe. A good mechanic can inspect the car for structural and foundational damage, then tell you exactly what needs to be done to fix it. This takes time and money. If you need a safe car now, a salvage car is not for you. Consider avoiding a salvage car for safety reasons if:

  • You intend for the car to be your only car
  • You’re purchasing the car for a teenage child, and can’t afford to have it inspected for safety
  • You have very young children you will be driving long distances
  • You’ll need to install a car seat in the car
  • You have a very long commute, or must drive long distances regularly
  • You plan to use the car to transport groups


5. You Can’t Do Your Homework

It’s an unfortunate reality in the salvage title car world that fraud is common. This is particularly true if you have to pay for the car before you see it. No matter how many guarantees you get or how many contracts you sign, the seller could be long gone before you notice there’s a problem.

Purchasing a salvage car requires you to do some significant legwork. The benefit is that your time investment will likely pay off in the form of significant financial savings. But think twice about buying a salvage car if you have any reservations about doing any of the following:

  • Research the best possible insurance deal.
  • Figure out how to transfer the car. Many salvage cars are available in other states or in other nations, and you may have to pay transfer taxes or duties to get them home.
  • Hiring a mechanic to evaluate a car for safety.
  • Spending money on a car only to find that you need to junk it because it’s not safe to drive.
  • Researching the car’s history and comparing it to any and all claims the seller makes.

A salvage car requires either extensive knowledge of the salvaging and title process, or a willingness to do your research and lean on reliable people. If you don’t have the time or the inclination to do this, a salvage car is probably not for you.