For those who are planning to invest in secondhand cars, it’s essential to know what a salvage title is. This may actually make or break the deal for you. So even before you put your money on a pre-owned vehicle, make sure that you know the following aspects.
What is a salvage title?
A car with a salvage title means it has been totaled in the past and has undergone intensive repairs to be drivable again. When we say totalled, we mean that the repair cost is higher than the booked cost of the vehicle in the insurance company. This is a term used by insurers to let the car owner know that they will just pay the booked cost instead of wasting money on repairs.
Once the insurance company pays the booked cost of the vehicle or replaced the car, they will sell the totaled vehicle to a scrapyard. This way, they can recover a portion of their losses.
Meanwhile, the scrapyard will repair and refurbish the totaled car to make it drivable again. When they finished the repairs and the car is up for selling, it will be issued a salvaged title. Such a title informs the potential buyer that the vehicle has undergone extensive damage and repairs.
Take note that a vehicle with a salvaged title can’t be driven in public roads unless it passed rigorous inspections and testing.
How are cars categorized under salvage?
If the vehicle sustains intense damages, both physically and engine-wise, it could be categorized as salvaged. It could be due to collision, severe weathering, high-impact accidents, fire, and more.
Take note that a car doesn’t have to be warped or deformed to have a salvaged title. Some overused vehicles, including those driven as taxis or law enforcement vehicles, can be considered salvaged after a few decades.
Also, if a vehicle is sent back to a seller under warranty terms or reselling, it could cause the issuance of a salvaged title.
Is a salvage title a bad thing?
It depends on the condition and situation of the car. Usually, salvaged titles are intended to inform the buyer of the car’s history, so they will know what they are getting. However, it’s also proof that the car has been extremely damaged before.
Nevertheless, cars with salvaged titles are way cheaper. Besides, these cars won’t be allowed to be driven on the road if they are not in good condition. Some salvaged titles can even hold up for years, just like other pre-owned cars.
However, for those who are planning to re-sell a salvaged car, expect a lower price. Regardless of what triggered the issuance of such titles, buyers will always see salvaged titles as a pricing factor.
Take note that once a salvaged title is issued to a car, it can never be cleared. Nevertheless, some states will allow the changing of title to refurbished if it meets specific standards. You must be meticulous and careful in choosing the salvage title that you’ll invest in. Although these are heavily damaged cars, some are still excellent finds for those on a budget.