You may come across a salvage title problem when buying a used car or any other vehicle. Buying salvage title cars may turn out much more dangerous and expensive than just used cars, even though salvage vehicles are cheaper.
What Is a Salvage Title?
Salvage title means that the value of the car is significantly decreased because of its total loss status. Every year millions of cars are severely damaged in horrible wrecks, during thefts, vandalism acts or a flood damaged. Many of them have full coverage, so they totaled out by insurance companies. A total loss usually means that the vehicle is so badly damaged that repairing it up to roadworthy condition and safety standards is not cost-effective for the insurance company. As a rule, that happens when the estimated repair cost is 70-75% or more of the vehicle's market value before the damage.
The insurer pays the claim to the owner and in order to partially recover the loss sells the car at a salvage auction. At this point the car is issued a Salvage / Junk title by the state and in this status the vehicle in not roadworthy. You cannot drive it, only tow. Specifically, those of total loss vehicles deemed repairable get a Salvage title. They retain the salvage title in the US and Canada even after being properly rebuilt are re-titled as roadworthy. The vehicles destroyed beyond repair can be used for parts only, so they may get a Junk / Parts Only title or certificate. Such vehcies are not eligible for repair and can never be roadworthy again. All these titles are called branded titles. Once branded as Salvage, the vehicle keeps that branding for a lifetime, even after being fixed. The branding exists either as a Salvage History affix on a normal title or a special Rebuilt title suggesting that the vehicle has a total loss and salvage history. Title names may be different in different states, but the general idea is the same.
What is so bad about salvage title cars?
Quite often its hard to estimate the damage and how much you would have to invest in reparing to make it roadworthy again.
Safety question. If you are planning to buy a repaired salvage and re-title it, are you sure that a totaled car with salvage title was repaired by a competent mechanic and not a swindler who just patched it up to make a fast buck? It may have a bent frame that was not properly straightened. Severely damaged parts that were not replaced or repaired, or replaced with stolen parts. Deployed and not re-installed airbag. Or worse, it may be a "clipped" car with the back and front parts coming from different cars. It's no good if your car falls apart when you are driving it. Some of these issues may be discovered only during the inspection that takes place before you register the vehcile for the use on public roads again, like, use of illegal part. Some may emerge only when you start using the vehicle.
In some states, salvage title meaning covers not just to damaged but also stolen vehicles. You want to make sure the stolem vehicle was recovered and is no longer searched by the police.
Financial loss. Salvage cars are cheaper, you can save a few hundreds of a thousand dollars when you buy a salvage car. But in the end you will lose more because the chance to sell it later will be low so you will have to keep it until it falls to pieces. In addition, maintenance expenses on a salvage car mey be much higher.
In some states, only licensed bodyshops and dealers can repair and re-title Salvage vehciels.
How to avoid salvage title cars?
The first step is VIN Number check and vehicle history report. Salvage title is not the only problem a used car may have, it can have odometer rollback and other flaws. In fact. odometer rollback on ex-salvage cars in not uncommon as it helps sell them at higher price, even though its illegal. Another example, there were many cases when an insurance company sold salvaged cars to rebuilders with clean titles for extra fee. Also, a totaled car may be offered back to the owner as an insurance buyback, in this case it sometimes can retain its clean title because it was not owned by the insurance company and the owner is responsible for the repair. In fact, replacing deployed airbags is not mandatory for the owner. Are you sure the car you want to buy is not of that kind?
Vehicle history report helps discover many hidden problems in a used vehicle, not just salvage title. In as matter of minutes you may find out that the car you were planning to buy is not even worth consideration and the money you would pay to a mechanic to inspecting it. You can get vehicle history report by the VIN in a matter of minutes for a very modest fee, which is not comparable with the cost of your time, efforts and money you could overpay for a clunker.