If you're in the market for a great deal on a used car, you might come across an ad with the words "salvage title" in fine print at the bottom. What is a salvage title? What does it mean to purchase a vehicle under a salvage title? Is a car with a salvage title insurable with the right auto insurance? We've done some of the research for you so you can decide if a car with a salvage title is worth the risk.
What Is a Salvage Title Vehicle?
According to Keith Griffin, an automotive journalist and president of the New England Motor Press Association, "A salvage title is given to any vehicle that has sustained damage worth 75% or more of its value. For example, if you drive a 2002 Honda Civic worth $9415 and it suffers $7061 in damage in a collision, it’s going to be branded with a title stamped 'Salvage.'" Some states call this a junk title rather than a salvage title.
This brand stays with the vehicle for the rest of its time on the road, from owner to owner. You cannot change it once it has the brand of salvage vehicle. This practice means to protect consumers from buying a car that may have structural flaws or compromised safety features.
But that does not mean that all salvaged title vehicles are fundamentally flawed. Some have only sustained major sheet metal damage that poses little risk to drivers after repair. Some of the totaled cars that may receive a salvage title:
- Collision-damaged cars
- Flood-damaged cars which may be specifically named in some states or which receive a generic salvage title in other states
- Hail-damaged cars
- Stolen cars that have been paid off by insurance and later recovered by law enforcement
- Cars that have been vandalized with spray paint or rolling for instance or that have major dents and breakages
You can save as much as 33 percent of the price by buying a car with a salvage title, but you'll have to do a lot of homework. Purchasing a salvage vehicle means that you must be extra diligent in the inspections stage, especially when it comes to the frame inspection and the mechanical inspection, according to Griffin.
He explains, "The most important inspection is going to be the frame. Find an auto body shop with certified technicians to do this work. It’s worth the cost." The condition of the frame can tell you a great deal about the kind of damage the car suffered in the past and whether it is likely to cause you financial headaches in the future.
What About Rebuilt Title Vehicles?
A rebuilt title or reconditioned title still falls under the auspices of the salvage brand, and in most cases, it is a crime to sell a rebuilt vehicle without stating that it was once under a junk or salvaged title. Expert sources say, "This term varies slightly in most states, but is generally used to describe a vehicle that was considered salvage and was then repaired or restored." In most states, a car must pass several inspections to ensure that all safety features work correctly before a vehicle can receive a rebuilt title.
How Do You Insure a Salvage Title Vehicle?
Salvage vehicles pose extra safety and reliability risks, and that means they may be harder to insure. Expert sources say, "Most insurance companies will insure a salvage-title vehicle, but if you happen to get into an accident, the total loss payout you'll receive will be much lower."
In this case, a local independent agent can be a great source of help. Independent insurance agents can access many companies to find the one that offers the most comprehensive protection for your rebuilt title car. An independent insurance agent might also help you get the auto coverage you need to ensure you will have enough funds available to replace your salvaged title car if it is once again a total loss.