Avoiding the Pitfalls: Your Guide to Steering Clear of Salvage Titles
Blog > Avoiding the Pitfalls: Your Guide to Steering Clear of Salvage Titles

Shopping for a used car may uncover a deal that seems too good to be true. If that’s the case, your intuition probably serves your right. The used car industry is chock-full of vehicles with salvage titles — which should be approached with extreme caution, if at all.

What’s a Salvage Title?

In the simplest terms, a salvage title is a car that’s been severely damaged, rebuilt, and returned to driveable condition. If this raises some red flags for you, you’re in good company. Salvage titles (also called branded titles or rebuilt titles) apply to vehicles that have been deemed a total loss—or totaled—by an insurance company. When a car gets damaged beyond repair (damage between 50-90% of the car’s total value), it either gets sent to the junkyard for scrap or is bought, rebuilt and resold.

Why You Should Avoid Salvage Titles

Salvage titles belong to a unique breed of cars that have seen their best years and will essentially never be whole again. These cars were either in bad accidents or saw extreme weather that earned them a write-off from the insurance company. As far as you’re concerned, a salvage title is a Frankenstein car starting a new life at your expense. While the dealer you’re buying a salvage title from may tell you it was just a small fender bender, you’ll have to keep in mind that whatever happened to this car was enough to consider it totaled. This presents a slew of potential safety risks, malfunctions, and defects that any sensible car shopper would want to avoid. Salvage car dealers may also employ cost-cutting tactics to make a rebuilt car appear safer than it actually is. All salvaged cars are sold in as-is condition, and as long as the dealer doesn’t hide the fact that it’s a salvage title, there are no warranties or legal obligations on behalf of the seller. If the term ‘let the buyer beware’ had a textbook definition, surely this would be it. If you ever did decide to buy a salvaged car, you’re going to find that getting insurance on your vehicle is a tall order. Most insurance companies refuse to insure salvage titles due to their high-risk claims, and will only offer limited coverage — if you’re lucky. You’ll also find that when it comes to salvage cars, you’re pretty much buying for keeps. There’s almost no chance of getting any trade-in value, and making a private sale will be a frustrating experience at best.

Salvage Titles and Third-Party Websites

Modern salvage car dealers have come to know and love third-party car classifieds websites such as CarGurus, where it’s easy to push salvage titles onto unwitting shoppers thanks to low price badges and other features that focus on the best deal in town. Salvaged cars can be made to look as though they’re perfectly good pre-owned vehicles (unless you know exactly what to look for), and even the titles can be made to look “clean” and non-salvaged. If you’re browsing for a used car, make sure to check your state’s salvage title laws to learn what to expect when distinguishing a real clean title from a salvage title.

Being a Smart Used Car Shopper

If you’re shopping for a used car, a certified pre-owned vehicle is almost always the way to go. These cars will have proper documentation to back up their quality and will typically be in a slightly higher price bracket than the bottom of the barrel for your car model of interest. Understandably, most people are shopping for a used car to save money, but it’s wise to consider that the initial costs of a vehicle will always be offset by long-term costs — so getting the lowest price now doesn’t mean you won’t be sorry later. Of course, if you find an amazing deal on a car, it doesn’t always mean you’re getting conned. Just make sure you check the vehicle’s history with a CarFax report to weed out any funny business. If the owner can’t produce a vehicle history report on the car they’re selling, just walk away.

The Upside of a Salvaged Car

While we wouldn’t recommend salvage titles to just anyone, there are people out there that find value in a cheap car that’s been spared of its final tow to the junkyard. If you’re proficient with cars and know how to diagnose repairs, parts replacement and safety features, you may find that taking the matter into your own hands is worth the savings. A salvaged title doesn’t necessarily mean that the car will fall apart on the road — it just doesn’t guarantee that it won’t. The more knowledgeable you are about cars—particularly if you can do your own repairs—the more a salvage title may begin to have value. If you’re buying the car from someone you know and have full insight into the car’s history, as well as a mechanic you can trust, a salvage title might not be a bad deal either. In general, salvage titles should be avoided considering the circumstances. A car will never be as intact as it was when it rolled off the assembly line, and a salvaged vehicle is about as far away from brand new as you can get.

Copyright © Certified AutoBrokers Inc.

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