December 23, 2018
Salvaged cars and salvage titles may sound forbidding to prospective buyers, but if you're willing to take on the risk, they represent an opportunity to save money when buying a car. Take a moment to understand exactly what a salvaged car is to see if this could be an option for you.
If your car or truck is in an accident and the cost of repairing the vehicle is too high compared to the value of the vehicle, your car insurance company will declare it a total loss.
Your insurance company will then take possession of the car or truck. In some cases, the car or truck gets sold to a repair facility and the vehicle is fixed or rebuilt. The new title that gets issued on the vehicle is called a salvage title.
Total losses are not infrequent, but they don't always mean the car has been damaged in a way that makes the car worthless.
A big accident on a low-value car where the engine or other critical moving part(s) is damaged or destroyed will cost a lot to repair and will not likely yield a reliable car. Such an example would be a risky purchase of a salvaged car.
If, however, instead of engine damage, the vehicle suffers cosmetic damage, it will also be expensive to fix and could even be considered a total loss, but may be an attractive option to purchase as a salvage since the engine and other important parts are presumably in the same condition as they were prior to the cosmetic damage.
The most important factors to consider when thinking of a prospective purchase are:
- What elements of the vehicle were damaged enough to cause it to be labeled a total loss?
- Are those elements critical to the performance of the car?
- Are the costs of repair within my budget and worth the effort?