A salvaged car is a vehicle that has been declared as totaled by the insurance company. Insurance companies take this step when the costs of damages exceed the cost of the car itself. Once an insurance company deems a car to be salvaged, this goes on the car’s title. If you’re looking to buy a salvaged car, you can get a great deal, but it’s best to proceed with caution.
The major draw of buying a salvaged car is that they cost thousands of dollars less than regular vehicles. Once a car has a salvage title, it can’t be reversed, and the Blue Book value of the car no longer applies. That means sellers will get rid of them for as low a price as possible. Sometimes buyers will pay 20 – 30% of what a car of the same model with a regular title is worth.
Buyers of salvaged vehicles will have to invest in repairs, to get the car in good running condition. A salvaged car that has suffered structural damage can be costly to repair, but if the damage is purely cosmetic, it may be easy to fix. For buyers who are knowledgeable enough to do their own repairs, the savings can be worth it.
If a salvaged car has suffered damage to the frame, it’s often not worth the money to invest in repairs. Structural damage is costly, and the repairs will outweigh any savings. Newer vehicles that are salvaged are often not worth the money, as they are higher in value to begin with, and to be declared salvaged, the costs of repairs need to be greater than the value of the car. That means a car worth $20,000 dollars will need more than $20,000 worth of repairs to be road worthy.
Getting insurance is one of the major drawbacks of buying a salvaged car. Some insurance companies will refuse to insure a vehicle with a salvaged title. Others will make you pay high rates due to the possibility of unknown issues. Some drivers; however, are able to negotiate lower insurance premiums based on the low value of the car.
Salvaged cars have little resale value, since standard prices don’t apply and buyers may be wary of a salvaged title. But if you plan on driving the car until it no longer runs, it can be worth the investment.