Pros and Cons of Buying a Salvage Title

trabant-782799_1280When an insurance company determines their policy holder’s car would cost more to repair than to replace, it is certified as “junk” or “salvage.” They prefer to supply funds for a brand new vehicle. The original car cannot be re-sold for use on the road in its current state but can be purchased by a mechanic or parts-yard and either repaired or dismantled. If the vehicle is repaired for resale it will be given a “salvage title.”

What is a Salvage Title?

Every car sold on the legitimate market should come with a certificate stating its road-worthiness and origins. If it has been declared unfit for resale by an insurance agent, any future buyer must know this fact. This car’s past could be pretty dramatic and the new owner will want to know this, but it’s totally legal to sell the car. One way to check the vehicle’s past is to buy a VIN Audit Report from

Why Buy a Salvage Title?

These cars sell for significantly less than ordinary used cars, making a salvaged car great value for someone with a tight budget or for a skilled mechanic. Even if you buy from a mechanic and he adds on his repair costs, the price will be extremely low. Besides, a dealership or private person cannot sell this car on unless it has first been proven road-worthy. This process could put a really expensive car within reach of someone with a less than luxurious income.

Is There a Problem Getting Insurance?

As the car in question demonstrates in tangible terms, accidents happen. The new owner might have to file a claim. Insurance companies do not usually refuse to insure these vehicles but there is less coverage for them. The payout if you need repairs will be lower than what they would pay if you drove a regular car.

Uncertainty of a Salvage Title’s Past

There is also a level of uncertainty here. While the salvage title must also include details of what happened (flooded engine, hail damage, vandalism, etc.) and has passed inspection, hidden problems might still lurk deep within the car. This is also true of regular used and even some new cars, but it’s something to be aware of. In some states, salvage cars were stolen and then abandoned. They might have suffered vandalism while also being involved in criminal activity which can be a creepy history to adopt.

Potential Resale Headaches

Also, should you ever want to sell the car on again, this could be harder than you expect. Some consumers can’t get past the idea that an automobile was once too far gone for an insurance agency to fund repairs. Keep that in mind if you are thinking of buying a salvaged car from an insurance company for resale or if you think this purchase is going to be a temporary fill in before buying something better.