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What Is A Car Salvage-Title Vehicle?


Sometimes a car deal can seem too good to be true. After getting excited over find the car you want at a great price, the words “salvage title” appear.

What does this mean and, more important, should you steer clear of such a vehicle?

In essence, a car with a salvage title has been in an accident, flood, fire, vandalized, or other event, and the insurance company declared it a total loss. The percentage of value the insurer uses to determine whether a car is beyond repair varies from about 75 to 90 percent.

Depending on the state, the department of motor vehicles (DMV) will generally issue a “salvage certificate” for the vehicle. Any vehicle that has been issued a salvage certificate cannot be driven, sold or titled in its current condition.

What happens next is that the insurance company typically sells the vehicle to a parts dismantler or a repair facility. If the vehicle is repaired, in most states, the vehicle has to pass a safety inspection before the DMV will issue a new title. The title will be “branded” as a salvage-title vehicle, noting that the car has been salvaged or rebuilt. This is to ensure that any prospective buyers are aware of what they’re getting.

According to Carfax, in 11 states (Arizona, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oklahoma and Oregon), the salvage title may indicate that the vehicle was stolen.

Buying a salvage-title vehicle

If you’re up for the challenge and willing to go through the time and expense to have the vehicle repaired correctly, buying a salvage-title vehicle may be the right decision. It may also be opening up Pandora’s box of car problems, since salvage-title vehicles are often prone to more problems.

Tips for buying a salvage-title vehicle:

  • Have it inspected. It is important that you know what is wrong with the vehicle, and you need a professional to ensure you’ve got the complete picture. Bring a mechanic with you to look at the car or have it taken to a body shop where any repairs already made can be checked to make sure they were done correctly.
  • Buy a vehicle history report. This document will detail the vehicle’s history and will show if the vehicle has a salvage title. It may also indicate if an insurance company declared the vehicle a total loss, even if a salvage title was not issued by the state DMV.
  • Get copies of repair work completed. Ask for copies of all repair work that has been done on the vehicle. It is also a good idea to speak with the mechanic who performed the repairs, if possible.
  • Go with a reputable seller. Avoid some of the headaches by buying a salvage-title vehicle from a reputable repair facility.

Selling a salvage-title vehicle

When the time comes that you decide to sell your salvage-title vehicle, the only option you have is a private-party sale or to an independent dealership. Most franchise dealers won’t take a salvage-title vehicle as a trade-in.

Do not attempt to hide the fact that this is a salvage-title vehicle, as this is fraud.

Experts say that determining a fair selling price is a tough proposition. Starting with the price you paid for the salvage-title car is probably the best option if you’re selling to a private party, deducting $1,000-$2,000 if you’ve driven the vehicle a few years. If selling to an independent dealer, be aware that they won’t offer you much.

Bottom line: buying or selling a salvage-title vehicle is not for the faint of heart. Know what you’re getting into before you take the leap.

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