What is a Salvage Title Car?

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Cars with salvage titles can be a great purchase for those who are looking to save money and don’t mind doing some repair work. But it’s important to understand what you’re getting yourself into before making the decision to buy a car with a salvage title. 

Let’s take a look at exactly what is meant by “salvage title” and what that can mean for the future of the vehicle.

What is a Salvage Title Car?

A car with a salvage title, also referred to as “scrap title”, is one that has suffered significant damage from a major accident, fire, flood, or other events. 

Salvage title cars have suffered damage to their frame and/or body that is significant enough to be considered “totaled” by an insurance company. 

That means that the insurer has paid out more in repairs than the car is worth, so the car is then labeled as a salvage vehicle. While this often results in negative equity in the event there is a lien on the vehicle, the label of “salvage” is separate from the vehicle’s equity.

In the state of California, for example, vehicles with salvage titles are deemed to be so damaged that they can no longer be driven safely on public roads. As such, they must be repaired before they can be sold and registered.

What Does a Salvage Title Mean?

A vehicle’s title is a document issued by the government that shows who legally owns a vehicle. This document can include a variety of information and labels including if it is a “salvage” or “scrap” title. 

If a dealership receives a vehicle that meets the criteria of a salvage title, but doesn’t have one, they actually have to apply to get the title switched to salvage status.

Advantages of Buying a Salvage Title Car

Since salvage title cars are already devalued, they can be significantly cheaper than other vehicles. 

Here are some advantages of buying a salvage title car:

  • Cheaper than other vehicles

When you buy a salvage title car, you are often able to get a vehicle for an extremely good price. However, you may have a hard time financing the vehicle, especially if you have damaged credit.

  • Ability to customize

Another advantage of buying a salvage title car is that it can be mechanically or aesthetically customized to your own preference.

  • Great way to learn

For those who have some mechanical knowledge, buying a salvage title car can be a great way to learn about automotive repairs.

  • Can be a profitable investment

In some cases, buying a salvage title car can turn out to be a great investment. If you are able to repair the vehicle as needed and make it roadworthy again, you may be able to sell it for more money than you paid for it originally.

  • Can be registered and driven

Although salvage title cars can’t be driven on public roads until they’ve been repaired, once the necessary repairs have been made, you should be able to register the car and drive it as you would any other vehicle.

Disadvantages of Buying a Salvage Title Car

Despite some of the advantages of buying a salvage title car, there are also some potential drawbacks to consider before making the purchase. 

Here are some of the disadvantages of purchasing a salvage title car:

  • Risk of hidden damage

When you buy a salvage title car, it’s possible that there could be more damage than is immediately visible. This is why it’s important to get a full salvage title inspection of the car before buying it.

  • Cost of repairs

It’s likely that you will have to cover some repair costs associated with getting the salvage title car roadworthy again. Depending on how much damage the vehicle has sustained, this could end up being more expensive than anticipated.

  • Difficult to insure

It’s also important to note that some insurance companies may refuse to insure salvage title cars. This is something you should investigate before making the purchase.

Should I Buy a Car with a Scrap Title?

When it comes to deciding whether or not buying a salvage title car is right for you, there are both advantages and disadvantages to consider. It can be a great way to get a good deal on a vehicle, but it’s important to be aware of the associated risks. 

Ultimately, you’ll need to weigh the pros and cons and decide if it’s something you feel comfortable taking on.