Purchasing a vehicle with a salvage title can be an excellent way to save money. While it's true that salvage vehicles can sell for thousands less than a comparable car with a clean title, you can also find yourself in a world of financial hurt if you don't know what you are doing.
I have personal experience with salvage titles and have learned from the good and the bad about them. That's what you need to understand is that salvages can be a double-edged sword that isn't necessarily all good or all bad. Knowing what you're getting yourself into before you take the plunge is a good idea.
Maybe you've heard the term "salvage vehicle" before but don't understand exactly what it means. A car is marked as a salvage when it has been in an accident and the cost to repair the damage exceeds the current value of the car. At the same time, the stigma of a salvage title can lower the price of the car to far below what it's really worth, even with the blemishes. Before you even consider purchasing such a vehicle, consider the following tips.
Considering that a vehicle that is given a salvage title has to suffer more damage than the car itself is worth, it's likely that there will be flaws. It's a simple business decision for anyone who decides to repair the car, because they obviously won't get the cost of doing all of the repairs properly back out of it. You must learn all you can about the damage done to the car, otherwise you can't make an educated decision. If you find out that the car fell prey to fire or flood, run the other way. Water as well as fire can cause extensive and unseen damage to a car, setting up problems that will crop up months or even a year or so later.
When a car has been damaged in a collision, you need to remember that some crashes are worse than others. There are ratings those in the automotive industry use to rate the severity of damage done to a car. Cars with an A rating have terrible damage, B is bad damage, C and D are set aside for cars with damage that can be repaired with little effort. You should look for cars that have damage to the body, or at the worst damage to mechanical components. If you find a car that has frame damage, you need to leave it alone since it will be a source of constant problems.
You should also know that financing a car with a salvage title can be difficult. Some banks absolutely won't provide financing for a vehicle that has a damaged title, no matter what. Other lends will offer a loan, but at a much higher interest rate. For this reason alone, many people who are looking to purchase a salvage vehicle bring along cash.
If you ever wreck your salvage car, be prepared to receive less from the insurance company. This is the case even if another driver hits your vehicle and is found to be one hundred percent at fault. You are taking a risk with a salvage vehicle, which is why so many owners of cars with a damaged title only insure the car up to the level that is required by their state.
In the end, you should steer clear of vehicles with salvage titles if the car normally would be expensive to purchase. If you think about it, a newer luxury car that would normally sell for about $60,000 but has a salvage title has suffered some pretty serious damage for the value of the repairs to exceed the car's value. On the other hand, a car that is normally worth $4,000 would not have to suffer nearly as bad of damage to be labeled with a salvage title.