Should You Buy a Used Car With a Salvage Title?

Buying a used car with a salvage title isn’t necessarily a bad idea, but it comes with more risk than purchasing a comparable vehicle with a clean title. A vehicle with a salvage title generally means that an insurer declared it a total loss, although the reasons can vary depending on the state in which the vehicle is registered.

If you’re considering purchasing a vehicle with a salvaged title, the potential cost savings should outweigh the potential risks associated with the vehicle. That includes repairs, insurance coverage, financing, resale value, and future reliability.

In this guide, we’ll show you that buying a vehicle with a salvage title doesn’t necessarily mean that you’re doomed from the start. In fact, in some cases, you could be getting a great deal. But it comes with a few caveats.

What Does a “Salvage Title” Mean?

A vehicle is given a salvage title when it has been significantly damaged and declared a total loss by your insurance company. The damage could result from several situations, including a collision, flood, fire, hail, or theft recovery.

A salvage title doesn’t necessarily mean the vehicle is unsafe to drive. In many cases, a salvage vehicle can be repaired and inspected before being returned to the road. However, the title history remains part of the vehicle’s record, which can affect its value and make it more difficult to insure or finance.

What Are the Risks of Buying a Salvage-Title Car?

The biggest concern with buying a salvage-title vehicle is that you may not know the full extent of its previous damage. Even if a vehicle looks and drives normally after repairs, some damage may not be immediately apparent.

For example, a poorly repaired collision could result in alignment problems, electrical issues, premature tire wear, or problems with the vehicle’s structural components. Flood-damaged vehicles can also develop electrical and corrosion problems or even years after the original damage occurred.

Before buying a salvage-title vehicle, have it inspected by an independent mechanic who is familiar with the vehicle’s make and model. You should also obtain as much documentation as possible about the vehicle’s previous damage and repairs.

Can You Insure a Salvage-Titled Vehicle?

Getting insurance for a salvage-title vehicle can be more complicated than insuring a vehicle with a clean title. Some insurers may be willing to provide liability coverage but may not offer comprehensive or collision coverage, particularly if the vehicle has not been properly inspected or rebuilt.

This can be especially important if you’re an active-duty service member who may need to move to another state. Insurance and title requirements can change when you PCS, so check with your insurer before purchasing a salvage-title vehicle.

Is a Salvage-Titled Car Cheaper?

One of the biggest advantages of buying a salvage-title vehicle is its more affordable purchase price. Depending on the vehicle’s condition, history, and accident history, it may sell for significantly lower than a clean-title counterpart. However, don’t focus solely on the purchase price.

It’s important to also factor in the cost of the inspection, repairs, insurance, financing, registration fees, and the eventual resale price. A vehicle that costs $8,000 compared to $12,000 isn’t necessarily a bargain if it requires thousands of dollars in repairs or is difficult to insure. In that case, you may want to pass on it or buy a car with a clean title instead.

However, if you can find a salvage-title vehicle with a low purchase price and free of immediate issues, that’s the sweet spot. This is why it’s important to have the vehicle thoroughly inspected before handing over your hard-earned dollars to the seller.

Should You Buy a Car With a Salvage Title?

A salvage-title vehicle can make sense for the right buyer, particularly if you understand the vehicle’s history and are getting a significant discount. However, it isn’t the right choice for everyone.

If you’re considering purchasing one, it’s imperative that you get a pre-purchase inspection done by a qualified mechanic. It’s also a good idea to review the vehicle history report (from either Carfax or AutoCheck), research the title requirements in your state, and contact your insurance company before completing the vehicle purchase.

You should also consider how long you plan to keep the vehicle. If you expect to sell or trade it in a few years, its branded title could make finding a buyer more difficult.

For many buyers, the lower price isn’t worth the additional uncertainty. But if you find a well-repaired vehicle with thorough documentation and a price that reflects its history, a salvage-title car doesn’t automatically mean that it’s a bad investment.