What is Salvage title? Buyer Tips

Is it Worth it to Buy a Salvage Title Car?

By Mike Richards Updated: 07/26/2022 Posted: 02/17/2020
Online auctions have made it easier than ever before to buy salvage title cars online, but are they worth buying? Let’s look at what a salvage title car is, the process of buying them, and what you need to do with them.
This type of cars are becoming more popular among people who flip cars for a living, or those interested in getting a car at a lower price. However, before buying a salvage title car, it is essential that you find out why it received that title brand. Also, find out the cost of repair and what skills will be needed to work on the car. This information is crucial in deciding if buying a car with a salvage title over a clean title is worth it for you.

What Does it Mean When a Car Has a Salvage Title?

The biggest misconception that people have about a salvage-title vehicle is that it was completely wrecked in an accident, and that therefore the car is at a total loss. In reality, they are not always completely wrecked. You can actually get an incredible deal on a car in decent condition by purchasing a car with a salvage title, over another title brand.
Vehicles may get labeled with a salvage title in different circumstances, other than a total loss. A common situation is when the insurance company of the previous owner estimates that repairs on the vehicle will exceed a certain percentage of its value (often around 75%). In this case, the insurance company will write-off the vehicle, pay its owner a lump sum and take possession of it.
One of the reasons is the car, SUV, or motorcycle was damaged in an accident. The damage may be extensive, but because insurance companies deemed a vehicle salvage if it costs more to repair it than the fair market value of the vehicle, the fact that the vehicle is now considered salvage may not reflect the extent of the damage. It just reflects the insurance companies’ calculation of what is worth their money, according to the fair market value.
These are not the only reasons why a car may be labeled salvage either. Another reason is if a car was stolen and the insurance company paid out before it was recovered. Even after being recovered, the car would be issued a salvage title, even if nothing was wrong with it.

inspecting salvage car

Why you Should Buy a Car with a Salvage Title

When looking at a salvage-title vehicle, you will discover some with significant damage, while others can be repaired more easily, or in some cases vehicles with no repairs required. You need to consider the reasons behind your decision to buy a car, SUV, or motorcycle with a salvage title. Is it for parts? Do you want to fix it and resell it for a profit? Or are you buying the car for your personal use? If you enjoy rebuildable cars, you may want a car that will challenge your restoration abilities. If you’re less handy with repairs, you will want to look for vehicles with less or no damage, or even a different current title even if those may cost more.
There is no doubt that a salvage-title vehicle can be very cheap, especially at auctions. Some of the owners simply want to dispose of these cars, while insurance companies may want to recover as much money as possible as quickly as they can. The reasons behind the sale of the car, SUV, or motorcycle will help you decide which car will be a worthwhile investment.
Many of these cars can be rebuilt and made roadworthy again. However, you need to estimate the cost of getting the vehicle back to working condition factor in those repairs when looking at the overall value of the car. By knowing these factors, you can decide whether making such an investment is worthwhile.

Risks of Buying a Salvage Title Car

Even though there are many potential financial gains from buying salvage title vehicles, there are some risks you need to take into account.

Difficulty to Insure

Before buying a salvage title car, you need to find out if you can get insurance for it. You should start by talking with large companies or a company you have been getting coverage from, and already have a relationship with. It’s sometimes easier to convince an insurer to cover your salvage title car if you already have other policies running with them. Another detail to take note of with regards to insurance is the condition and safety standards of the vehicle prior to purchase. If the vehicle did not need repairs at a body shop prior to being purchased at auction, then the chances of acquiring insurance or liability insurance are higher than if the car needed repairs, especially for those vehicles with damages that affected the structure.

Repair and Maintenance Costs

Although you may get a good deal for a motor vehicle at an auction, the real issues might appear when you want to repair and maintain an accident vehicle. Though this is not always the case, cars that suffered major accidents could have structural damage and can’t be out on public roads. So it is important that you take into account potential repair costs for the motor vehicle in your budget. Remember there are no refunds.
Some issues in crashed cars may simply never disappear. Even after many visits to a mechanic, the car can still continue to have issues with alignment or even have persistent electrical issues. If you are looking to buy and resell, this may not be so much of an issue to you, but if you are looking for something long term, this may be a headache you would want to avoid. That’s why you should always take the vehicle’s history and condition into consideration before you decide to be a buyer.

How to Buy a Salvage Title Car

The best places to find salvage-title vehicles are dealer-only auctions. However, to attend one of these auctions, you would normally need to hold a valid dealer’s license in your paperwork. These are difficult and costly to get and are not worth the time and effort to obtain if you are only looking to buy a single salvage vehicle.
However, there is a way around this restriction. Dealers like Auto Auction Mall offer to use their own dealer’s license to give you access to the inventories of online dealer-only auctions. You won’t be able to bid directly yourself, but Auto Auction Mall will do the bidding on your behalf. You will be fully involved in the process, choosing the vehicle you are interested in and setting a maximum bid limit.

Why Auto Auction Mall is a Great Choice

Auction Auto Mall has one of the largest online inventories of used, like-new, pre-owned, and salvage cars available. You can search for any type of car, make, model you want using the available search functions located on the website.

Many consumers rate AAM higher than other sites because of the enormous variety of vehicles available. Besides, AAM offers the best customer service to buyers. AAM representatives are available to help you at any time. The representatives at Auto Auction Mall will walk you through the process, help you to bid, and make sure to acquire the vehicle you want without any hassles or headaches.
AAM also has financial advisors ready to work with you and help you finance the vehicle you choose. Offers made include low down payments, low interest rates, and some of the best deals available on any online auto auction site today.

Example Auctions Currently Live

Things to Know Before Buying Salvage Title Cars at Auction

Know the Market Values

Before going to an auction, it is important to do some prior research on the market values of the vehicles you may be interested in. There’s no warranty or perfect car and, many times, a good deal may not be as good as you think. A Porsche being offered for a much lower-than-market-value ticket price at auction may seem like a good deal as Porsches are known to be luxury cars with a high ticket process. The problems lie with the repair costs. And the very expensive replacement parts that need to be acquired to fix the vehicle. In this and in many other situations you could lose more than you gain without the proper research.

Use a Mechanic

It is true that you cannot inspect the vehicles available at online auctions personally. However, you can compensate for that limitation in several ways. Reputable auction platforms will provide a wealth of information on the vehicle as well as many detailed photos. Also, getting expert advice from a mechanic who is very familiar with the type or types of salvage vehicles you are looking into can be of great help. Even with all the research in the world, there are important details you can miss and you lose a lot. Getting advice from a mechanic will help you make an informed decision.

Further Reading

Underside Car Inspection

Some Strategies for Buying Salvage Title Cars

When you’re looking for a car with a salvage title you will find some vehicles with significant damage, while others can be repaired easily. When making your decision, you need to look at the reason behind your decision to buy salvage cars. Is it for scrap? Do you want to fix it and resell it for a profit? Or are you buying the car for your personal use? If you enjoy rebuilding salvage cars, you probably want a car that will challenge your restoration abilities. Your reason will determine the kind of car you should choose.

Set your Budget

Set your budget, as well as the maximum you can spend on the vehicle, and include repair costs. Some vehicles are more in demand than others. Demand drives up the price of a vehicle at auction. You should also consider the price for the parts necessary to fix it. Whether looking at old vehicles with scarce spare parts or recent car models with expensive parts coming from the factory. Estimate how much it will cost you to repair and maintain your vehicle.

Know Where to Acquire Car Parts

Junk yards and individuals looking to sell old broken-down vehicles/parts are what people think of when looking for spare parts. The big issue comes into play when it’s not just a few parts you’re looking for. But a large set of parts for a car that needs a complete repair job. When looking for a full set of parts for repairs, the big savings is buying another vehicle with intact parts. The best place to find these cars and car parts is an auto auction.
If, for example, you are repairing your car and want to save on the amount you spend on parts, a salvage auction is a great place to get quality, original parts at a low price. Sometimes it is difficult to find parts for older models of cars no longer in production. However, since many cars end up at a salvage auction, you are likely to find a car that is the same model as yours, even if not of the same age. This allows you to acquire parts for cheaper prices to repair your vehicle. Or even buy in bulk to use for various vehicles that you buy, fix, and resell for a profit.

car parts

Look for the Vehicle History Report

As mentioned before, the vehicle’s history can help you make a better decision when it comes to choosing a salvage car to buy. Request the VIN number from the seller when you find a car you are buying. You can use sites like Carfax to find out the vehicle’s history and check what repairs, especially major ones, were done on the car as well as its maintenance history. The vehicle history report will also give you information on what kind of damage resulted in the vehicle being labeled as salvage.

Know What Can and Cannot Be Fixed

It’s important to do your research and really know what you are dealing with before buying a car with a salvage title. Keep in mind that not all vehicles are repairable and that some vehicles will cost more to repair than others. Depending on the condition of the vehicle and the make and model.
Buying vehicles from a car auction has its risks, even if they have a clean title or a new title. However, it can also be very much worth it. It is very important to do your research and learn as much as possible before buying a salvage vehicle. In the end, prepared car buyers can find good opportunities in salvage-title vehicles.

Read more here on our guide to buying a salvage car.