Vehicle titles can have different designations or branding. These designations are designed to provide information about the history of the vehicle. What the terms are and when/how they are implemented varies across jurisdictions (states, territories) but one that many people are familiar with is a ‘Salvage Title’. Let’s take a look at what a ‘Salvage Title’ is.
What is a Salvage Title?
While the specific requirements vary, a vehicle will be considered totaled by an insurance company if it needs repairs that would cost more than some percentage of the value of the vehicle. This typically falls between 75% to 100% of the vehicle’s value. An example would be if a vehicle valued at $10,000 was in an accident and had enough damage that it would require $11,000 to be repaired. This vehicle would be considered totaled. Insurance companies then sell these ‘totaled’ vehicles to auctions, salvage yards, repair facilities, etc, and these companies can then make the necessary repairs and sell the vehicles. There are various designations of a Salvage Title that are used in different states. An example is in the state of Ohio where once the vehicle has been repaired it can then be inspected and if it passes and shows that it is roadworthy it will be issued a Rebuilt Salvage Title.
There are other reasons why a vehicle would get a Salvage title and here are some of them:
- Flood damage
- Hail damage
- Theft recovery
- Vandalism
Should Someone Buy a Vehicle with a Salvage Title?
There are people on both sides of the fence on this question and some of these people have very strong opinions. There are a lot of cons of buying a vehicle with a salvage title and one major pro. The pro is that the vehicle will be cheaper and this has obvious appeal. Some of the cons are: (1) If the vehicle wasn’t repaired well (this is often the case) you’re more likely to have issues with it (2) Some insurance companies won’t insure them and the ones that do will most likely not see the car as having much value in the case of an accident (3) Many dealerships won’t take Salvage Titles on trade-ins so when you go to get a new car you may have to sell it to a private buyer (4) It is hard to get a good return when selling a vehicle with a Salvage Title. In other words, there is no right answer to this question, but if someone is considering buying a vehicle with a Salvage Title they better make sure they know what they are doing.