A car or truck is a salvage vehicle if the insurance company deemed it a total loss, often due to the estimation that the cost to repair the vehicle is more than its value. The vehicle likely has been in a major accident, has been through a flood, or has other significant problems with its frame, body or parts. Although salvage vehicles are much less expensive than comparable used cars with clean titles, they have a number of disadvantages as well.
Cost to Repair
If you are buying a salvage vehicle that has not had any repairs done to it yet, you will be responsible for bringing it back into working condition. If the damage was greater than you anticipated, you might end up spending more on repairs than you saved by purchasing a salvage vehicle. Even after the initial repairs, you could find more problems as the car continues to break down or not work properly.
State Regulations
Many states require that salvage vehicles pass safety inspections before they can be registered in the state. After the vehicle passes inspection, the stamp on its title may be changed from "salvage" to "rebuilt," which adds some resale value to the car. Some states do not revise titles to reflect the "rebuilt" status until the car has been successfully on the road for a specific period of time.
Difficult to Insure
Insurance companies are often wary of insuring salvage vehicles because they are not in normal condition and may lack safety features. If you find a company that will insure the car, you will likely not be able to purchase comprehensive and collision coverage, which would pay for repairs to your car if you got in an accident. Driving a salvage car without liability insurance is illegal, and driving without full coverage can be risky because you would have to pay for all the repairs to the vehicle if it were damaged.
Lower Resale Value
A salvage vehicle will never have a clean title, as it will always be marked either as "salvage" or "rebuilt," depending on the car's status and the regulations in your state. This means that when you go to resell the vehicle, potential buyers will know that the car has had significant repairs and will not pay the same amount for it as they would for a car with a clean title. Buyers may also be wary of purchasing the car because of all the same reasons that you were, including difficulty insuring it, lack of confidence in its reliability and its decreased value if it were ever sold in the future.
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