I recently saw a car for sale on Craigslist. It was a great buy, but it had a salvage title. Should I buy it?
The casual car buyer should not attempt to buy a used vehicle that has a salvage title. It’s simply too risky. This should only be attempted by savvy car buyers who have a seasoned professional mechanic on call for such occasions. However, even then you should be aware that you’re taking a risk.
A Total Loss
A salvage title is issued once a vehicle has been classified as a total loss by an insurance company. In most cases, the cost to repair the vehicle is more than what it’s worth. This can be the result of an accident, theft, or a natural disaster such as a flood. The title is issued after the insurance company sells the damaged vehicle and the new buyer performs repairs in order to get it back onto the road.
Each state handles salvage titles differently, so check locally. This includes investigating the state inspection that is required prior to the salvage title being issued. What is covered in that inspection varies by state and may not actually determine if the vehicle is safe to drive. However, that’s not the only problem a buyer will face when they seriously consider buying a vehicle with a salvage title.
I’ve called around to different people selling vehicles with salvage titles on Craigslist. Without exception I was told that the vehicle they were selling sustained only minor damage in the accident or theft that resulted in the insurance company writing it off. The only way to confirm their story is to take the vehicle to a savvy mechanic who is familiar with what to look for in damaged vehicles. However, even then you’re running a risk. Is there hidden damage that can’t be seen? Were the damages improperly repaired? Were substandard parts used?
Insurance companies handle salvage titles differently. Your insurance company may not even be willing to issue a new policy on a vehicle with a salvage title. There are other concerns. Can you pay for the vehicle with cash? Banks, credit unions, and online lenders all have different policies concerning vehicles with salvage titles. Getting a car loan on the one you’re looking at may not be possible.
If You Must
We started out by saying that it’s too risky for the casual car buyer to consider a vehicle with a salvage title. However, if you found one that is just too good a deal to pass up, here are some guidelines to follow as you go through the purchase process.
- Have the vehicle inspected by at least one savvy mechanic who is familiar with salvage titles.
- Make sure it’s road worthy and in good driving condition.
- Make sure you can pay cash up front and don’t need a car loan.
- Talk to your insurance company in advance to make sure that they will provide—at a minimum—low-cost, basic insurance coverage. If not, see if there is another insurance company that will provide coverage before you actually buy the car.
- Make sure it’s an incredible deal that is worth the risk you’re taking.