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Is It Worth Buying a Car With a Salvage Title – Everything You Should Know

It’s worth questioning – is it worth buying a car with a salvage title at all? We all understand that purchasing a vehicle is a huge step in life, and it takes a particular process to do so. However, automobiles with this specific title have a very different purchasing method and other obstacles that you have to face. Often, you’ll have car dealership experts advise against purchasing one of these cars as the risks can be very high. You’re going to have a lot of costs and expenses after purchasing that can affect you in the long run. It’s best to learn as much as you can about damaged and refurbished automobiles, so you can determine whether it’s worth your time.

What Do I Need to Know About Buying a Salvage Title Car

What exactly is a salvage title car? These are cars that have significant damage, defects, or functioning problems. Either these automobiles have been totaled or are too old to function. Often you might see someone buying a car from a dealer who bought from an auction. These automobiles are mostly earlier models, but most of the work has been done to the car cosmetically, so there’s no surprise if it has a history of accidents. If you’re considering purchasing a salvage title car, you should know that it’s not easy and you’ll have a lot of work to do before and after your purchase.

Identifying a Salvage Title Car

So how can you tell what’s a damaged automobile and what isn’t? Before you ask the dealer about all of the car facts and take it to a car mechanic for a full inspection, there are some tell-tale signs to look out for. These are also really great tips for buying a used car:

  • When looking at a car, start by asking for the official deed to the car. Most states require car dealerships to directly identify an automobile that’s been in a salvage situation. This situation is when an automobile has been in a major accident or has had a history of problems rendering the car almost useless. Each state differs in what is considered as damaged, so be sure to check with your Motor Vehicle Department.
  • Give the car a good look and check for any indications of an accident or attempts to hide the damage. A good example is to check the paint job. If you see an easily chipped paint or any paint that doesn’t match the color of the overall exterior, it’s a clear sign that the previous or current owner is trying to hide scratches or tears on the surface. This also gives you the chance to ask about the car’s history.
  • You can also search for a Certified Automotive Parts Association sticker on the automobile or any parts. The CAPA label indicates that there could have been collision restoration done. The CAPA specializes in testing the quality of new car replacement parts for consumers, auto shops, distributors, and insurance adjusters. The purpose is to make sure that each car part is of good quality. A good indicator of a quality part is to find a yellow sticker with the CAPA stamp on it.
  • Checking the tires and wheel alignment can also be a good indicator of a collision to the car’s frame. It’s a simple trick, but a busted frame can also be a sign of further damage to the front of the automobile It can also be an indicator of future problems with constant realignment, which can be a lot in the long run.
  • Significant repairs to any type of framing like the hood of the car, the trunk, or if the car doors have issues closing correctly, it’s usually a sign that there were some major repairs done to the automobile. This indicates a big collision that happened and required extensive work to be done on the car.
  • You should also check how the car is functioning. If there are any electrical issues, it could be a sign of faulty wiring or water damage to the automobile. Another indicator of internal problems is if you notice any pings or strange noises when the car runs. These noises indicated some issues with the engine, like what happens when you put the wrong gas in your automobile.

Why You Should Be Cautious When Purchasing A Car With a Salvage Title

As we mentioned earlier, there are many factors and risks involved when purchasing a car with a salvage title. Even if a quick self-inspection of the car wasn’t enough to raise a few red flags for you, you should know what you’re risking. You should expect to spend a lot of time going through the purchasing process, which includes financing, repairs, understanding the worth of the car, and getting coverage for the automobile. It’s a very intense process, and not only that, but you have to be able to pay for all of it. The most significant risk to you is that the car’s repairs and other necessities might fetch for more than it’s worth. Even if you have one of the best import cars or even the president’s limo, the overall price of refurbishment might not be worthwhile.

Learn About Salvage Title Cars

Check out this video and learn about purchasing a salvage title car and everything that comes with it.

What Is Bad About a Salvage Title Automobile

When you decide on a damaged car, by now, you should understand what the risks are. But, are you prepared for all the bad that comes with it? At first, purchasing the automobile might sound like a good idea because it could come at a low price, or it’s a model you like. The worst part is that it can require a lot of money to take care of it. That requires that you have a good mechanic that can help you, but they can charge you a significant amount for the level of restoration. Besides that, getting the necessary information and coverage can be challenging to get as most automotive establishments won’t bother with a damaged car.

Common Problems That Come With A Damaged Car

Here is the list of the most common problems you may encounter if you decide to buy a damaged vehicle:

  • Hard to get financing – Most auto financing companies, banks, and other lenders aren’t comfortable with dealing with damaged cars mostly because they have no Blue Book value and can deny granting a loan. This makes placing a price on the automobile a bit difficult. Blue Book value is a measurement of car profit from the Kelley Blue Book. It measures the number of automobiles from exotic auto transport cars to used and refurbished automobiles. If a damaged car can’t be measured, there’s almost no chance that it will have any worth.
  • Safety risks – There are, most likely, a lot of functional issues and problems that can be a risk to your safety when purchasing one of these automobiles. It could be faulty wiring, bad wheel alignment, frame issues, bad quality car parts, etc. Several things could happen with the automobile while on the road. Your best option would be to make a thorough inspection, and it will have to pay a lot.
  • No warranty – Whenever you purchase a car from a dealership, you are always given a warranty that covers repairs to your car. This usually includes discounts on essential services and minor damages. In some cases, you’ll be able to get a certain amount of repairs done. With damaged cars, you have no warranty since it had to have extensive work to restore it. Also, most dealerships don’t typically sell damaged automobiles, and you’ll have to buy from a used car lot or someone selling their automobile online. Purchasing from these places will likely not give you any type of warranty in case something happens. You’re pretty much on your own.
  • No resale worth – As we just mentioned before, damaged automobiles hardly have any resealability. This is because the price of repairs costs more than the actual automobile itself, rendering it nearly useless. Not only that, but it can also cause your credit score to lower. So, if you see a car sitting on the side of famous routes in the USA, and it looks like it’s had a rough history, you might want to avoid it unless you’re ready to invest with little return.
  • High chances of fraud – Even though it’s illegal to do so, there are still a few swindlers out there who will try to sell you a damaged car. Some signs of this are if they fail to include the status of the automobile when asked or fall short of giving you the car’s full history. They usually come at an absurdly low price with a sales pitch that could convince a vegan that chicken parmesan has no meat. There will also be no background check on your part and no legal process when purchasing.

The Title Remains on the Car for Good

An interesting tidbit that those considering purchasing salvage title cars should know is that once the title is put on the automobile, it’s there for good. Even if you manage to get the car back to working order, it’s still required by law to have the tag. The only option you have to remove the label is to get a rebuilt label to replace the other. To do this, you have to get the car repaired and in good working condition first. After you’ve gone through that process and gotten it working again, you have to go to your local Department of Motor Vehicles and have it inspected for it to be allowed to drive legally.

Difficulty with Insurance Companies

Because the car has little to no resale ability, insurance companies are reluctant to cover damaged automobiles. They usually have no coverage policies for these cases. There are very few auto finance companies that will write collision and comprehensive policies for rebuilt labeled cars, but with very little coverage, and no terms or policies. Another issue is that the automobile was once deemed unfit to drive, so the premiums that are charged will most likely be higher than what you’re expecting.

Understand the risks that come with these damaged automobiles

Is Buying a New Car With a Rebuilt Title Worth the Search

So far, you’re probably asking yourself, “is it worth purchasing?” By now, we hope you have some idea of what to expect and whether you should buy that old model muscle car from the ’70s or one of the many earlier models, but still popular import cars. You have to go through a lot to determine the vehicle’s worth and know what means you have to make that decision. Perhaps before you decide what to do, you can get familiar with how to determine if it’s genuinely worthy of salvaging.

How Insurance Companies Determine Total Loss

Whenever you have an accident, you have to report it to your auto coverage provider immediately. If you’ve had a particularly unfortunate accident, your insurance company will have to determine whether the car is totaled and reflect on your premium later on. For your coverage company to determine the level of damage, they use a formula known as the total-loss formula.

Cost of repair + salvage value > Actual Cash Value (ACV)

A basic example of this formula is if you have a car that is $5,000 to purchase. Then let’s say you have an unfortunate accident, and the price to restore it is $5,500. The amount of restoration and recovery is higher than the car’s actual worth and will most likely be deemed as totaled. It can even happen if the price of restoration is less than the cash value as each determining factor can vary from state to state.

What Should You Ask for When Looking at a Damaged Car

If you’re insistent on buying a car with a salvage title, then you should know the right questions to ask beforehand. Remember that you should always be cautious when deciding on one of these automobiles. You don’t want to expose yourself or your finances to a purchase that will cost more in the long run. Take every precaution and ask as many questions as possible. There is nothing wrong with protecting yourself from a possibly poor purchasing decision. Here’s what to look for:

  • Exact damage – The damage details should be included in the car facts history report. If you notice something that seems off or isn’t contained in the report, always ask for clarification or further explanation. It will give you a better idea of what to expect before making your purchase.
  • Purchase details – Knowing the purchase history is a good indicator of things like mileage, and can give you some insight on how the automobile was handled. For example, if you find out that a family that owned your car includes an irresponsible teen or someone who’s had a history of poor driving you can determine what kinds of problems the car will come with. You’ll be in a better position to know if there are any issues, and also what they might be and where they came from.
  • The estimated price of restoration – To understand how much it will cost to restore, you need to take it to a trusted automobile shop and have it inspected. They know far more about automobile restoration and pricing than you and are also well equipped to handle all of your repairs. But before they do, you’ll be given an outline of the number of repairs, the level of difficulty, how many replacement parts you need, and the total price.
  • Double-check the price – There is absolutely nothing wrong with getting a second or third opinion about the price of the car and the price to have it repaired. It’s not uncommon for automobile shops and used car dealers to lie and charge you an absurd amount, so to keep yourself and your money safe, always be prepared to ask other experts for an honest opinion on pricing.
Make sure to understand the automobile's worth before making a purchase

Tips for Purchasing and Repairing

Knowing whether or not purchasing a damaged car is the right decision should be the first step forward. Even though there are many risks involved and it can be a long and trying process, it isn’t impossible. If you’re dead set on making that purchase, you should get to know what options you have to make things easier. You’ll need to have a firm understanding of automobile coverage, restoration pricing, how it affects your credit, and someone to guide you through the process.

Understanding the Market Worth of the Car

Whether you’re planning on purchasing a damaged car or selling a car, you should first determine how much worth the automobile has before making any decisions. To better understand it’s market worth, several factors have to be considered first. You need to think about the listing price vs. asking price and the length of time it takes to sell it. Since you are purchasing, you should be on the lookout for different pricing markers:

  • Wholesale trade-in prices – This is the price a dealer would pay to purchase from a car manufacturer.
  • Retail prices from dealers – This is usually the most visible price and the price that a dealer thinks is appropriate.
  • Retail worth for a private sale – The price set from one individual to another.

Once you have a firm understanding of the type of pricing that goes along with the damaged car, you can determine its worth much easier than having just the car facts by themselves. You’ll also stand a better chance of negotiating a price that’s more feasible for you.

Pre-Purchasing Inspection and Post-Purchase Inspection

A pre-purchase inspection is a great way to save you lots of time and money. Finding a reputable automobile repair company can be the difference between an excellent purchase and a horrible mistake. They’ll check for every internal problem and foreseeable issues as well as any tear, scratch, dent, mark, etc. After you’ve done a thorough inspection, you can see how to reduce the automobile’s expenses. A post-purchase review is conducted when you’ve already bought your car. The post-inspection might not help you get your money back for your purchase, but they can help fix damages and repair the automobile to working order. Not doing so puts you and others at risk.

Purchasing Refurbished vs. Repairing On Your Own

Pimp my Ride was one of the best TV shows about cars because it would feature automobiles in horrible conditions and then wholly restore them and make the automobile 100 times better. Most people know that doing some work without going to a shop can be a cheaper option. It’s entirely possible, but only if you know what you’re doing. Purchasing a refurbished car is a decent option if you want to buy it restored. You will know all of the car’s history, the problems that came with it, who the previous owner was, and what was repaired. At the very least you’ll know that it’s in working order.

If you choose to restore it yourself, it’s not a bad idea, but you have to know what you’re doing so you don’t do further harm to the car or yourself. You’ll have to have a level of comprehensive knowledge about car functionality and its parts before you start making any repairs. Then you’ll have to find a car part supplier either online or near you, as well as the proper tools.

Where Are You Purchasing From

A significant decision factor for purchasing any car should be who and where you are purchasing from. If you’re purchasing a salvaged car, it’s doubly important to know where to buy. Used car dealerships might seem sleazy at first, but you’ll have a much better experience than if buying from an individual. You run the risk of being charged extra with little information on the car to find out it’s in much worse shape than you were told. We also mentioned earlier that you should ask for the purchasing history to know who and where the car itself was bought. Not knowing any of this information could cause you severe problems down the road. With damaged automobiles, you cannot afford not to have that info.

Always ask an expert for help when purchasing this kind of vehicle

Laws for Salvage Title Cars

There are specific laws set in place for your and the dealer’s protection when it comes to purchasing damaged vehicles. These laws are put in place so that people can sell or purchase automobiles with insurmountable damage. These laws are typically known as “lemon laws.”

What Are Lemon Laws

The term “lemon” refers to motor automobiles that fail to meet a certain standard before they go up for sale. Lemon laws are necessary laws to protect car consumers from fraud and make up for defective and deficient running automobiles. An example would be if you’ve decided to buy a car from a dealership and it sold you a bad car. Depending on which state you’re in, you’ll be able to get fully reimbursed for the defective automobile or get a brand new car for the price you paid. Each state has its specific lemon laws, so you’ll have to check with your local DMV and check how lemon laws work in your favor.

Legal Recourse for Unknowingly Purchasing a Damaged Car

If you happen to buy a damaged car without knowing it, you should take legal action as soon as possible. A federal law states that you have to be notified if an automobile has been damaged. The first step in taking action should be to contact the consumer protection office in your state so you can ask what legal options you have. Next, you should seek out legal counsel from a lawyer. A major mistake most people make when dealing with this issue is that they forget to get all of the paperwork in order. Make sure you have all of your paperwork with copies. That includes car history reports, receipts, contracts, etc. Leave no room for loopholes or speculation.

There are laws that protect you when purchasing

Expenses and Looking for Loans and Financing

If you’ve paid attention this far, you’ll know that finding financial help for purchasing a salvaged car is difficult. Many automobile establishments and companies are reluctant to help and often advise against making such a purchase. However, we mentioned that it is not impossible to obtain it. You have to know where to look and who to ask if you’re adamant about purchasing a damaged automobile. Some automobile financing companies have policies for these cars, and they can even help by showing you how to register your vehicle in another state. One thing to note is that you will have to save and set a lot of money on the side.

Auto Financing and Loan Options

Though they can be quite hard to find, there are automobile financing companies that will help you make a purchase. To get financial help, you need to know the requirements in each state for driving a damaged car legally. Many of them require you to have the automobile inspected by local law enforcement, provide the total price for repairs and other information needed to determine whether or not the car is in good condition to drive legally. Applying for loans works much the same because banks need to know that there is some worth to the automobile, and they will have to have some personal credit information from you so they can give a fair estimate of how much you’ll be expected to receive.

Setting a Budget

In order to finance your purchase, you will have to set a budget for everything. The first step is getting a total for the car’s price, expenses for repairs, registration fees, and coverage. Having a budget will help you tremendously with this process, and you might even find a couple of ways to reduce costs when purchasing your new automobile.

Put together a budget for your automobile purchasing process

Moving Your Damaged Car Made Easy

Just as important as any other factor in purchasing damaged automobiles, you ought to know how to correctly ship cars. There are many automobile shipping options, but you have to find a reliable automobile transport company and ask about their transport services. You can ask about the enclosed trailer transport or open trailer transport and if they have a policy for damaged and restored automobiles. All in all, we hope that this guide has helped you decide whether or not you think it’s worth it purchasing damaged cars.