Perhaps you’re a mechanic and love shopping for dented, and salvage cars. Maybe you love fixing up old cars for profit. You may even have a legitimate side hustle in which you sell used car parts. You have your eye on a salvage car. So, the question of the hour is: “How much should I pay for a salvage car?” We have the answers you need!
If you are determined to purchase a salvage vehicle despite the obvious risks, you want to consider the following to ensure you make the safest purchase possible:
Get a mechanic to perform a complete inspection on it
Once you decide to buy a salvage car, you want to take it to a mechanic so that he or she can perform a complete inspection on it. Even if you are a mechanic yourself by trade, it will never hurt to have a second pair of eyes look over your vehicle. Sometimes, the excitement of buying a car, can cloud judgement. So be sure that you get a “second opinion” on the salvage car you have your eye on.
Obtain a vehicle history report
Even though you know you’re walking into a salvage vehicle, you still want to obtain a vehicle history report. You want to know all you can about the salvage car you are getting ready to buy. If you are able to obtain a vehicle history report from the salvage vehicle seller, then that would be great. You want to know all aspects of the salvage vehicle you’re buying.
Learn all you can about the car’s damage
As a salvage vehicle buyer, you want to ensure that you learn all you can about the car you have your eye on. Talk to the owner and find out why the vehicle was given a salvage title to begin with. Does the car have engine trouble as well as some heavy body damage? Even an engine rebuild job can be time-consuming and costly. So, find out about all of the damage the car has.
Find out when the car was given the salvage title
As you prepare to buy the car with the salvage title, you want to find out when the car received the salvage title. Was the title issued several years ago and has been driven on a regular basis? Do the repairs look adequate and the damage minimal to you? Or was the car involved in an accident recently? You want to know the specific date that your desired car that has been deemed salvage, got that salvage title.
Who is a Salvage Vehicle Good For?
Of course, you have heard the old adage, “what’s one man’s trash is another man’s treasure.” The same applies for a salvage vehicle. Sure, it may be salvage, but it may just be a car that can give new life to another one. So, what kind of folks have their eye on a salvage vehicle? See if you fall into one of the categories below!
- People who have an auto mechanical background or have enough knowledge to look at a car and possibly fix what’s wrong with it.
- Folks who know the seller of the salvage vehicle and have an understanding of what caused the car to receive a salvage title in the first place.
- A buyer who plans on keeping the salvage car for a long time till reselling it is not even an issue anymore.
- A person who needs a second vehicle that can reside at another property, such as a vacation home or a second dwelling.
- An individual who cannot get a loan for a car, and has to pay cash for a vehicle. For some folks, the purchase of a salvage vehicle can allow them to drive a car without paying lots of money.
Are There Any Benefits Of Buying A Salvage Car?
There sure are. Let’s take a look at a few below:
You’ll Save Money
Perhaps the biggest draw to buying a salvage vehicle, is the fact that you will save lots of money. Generally, a salvage vehicle is typically 20%, 30% and even 40% less than the same vehicle would be, with a clean vehicle title. You may even find a salvage car that is below 50% of its value. Vehicles that are inexpensive to begin with of course, have a bigger dip in their value. But car experts say to be warned. Just because a car that is worth $50,000- and then turns into a salvage car- doesn’t necessarily make it worth $25,000.
You Just May Have A Real “Jewel” Of A Car
Have you ever heard the expression: “finding a diamond in the rough?” You can certainly apply that old saying to a salvage vehicle. Oftentimes, when a car has a salvage title there is only just a bit of damage to it- and it’s still sold for a very low price. For example, a sleet or hailstorm might have damaged the outside of the vehicle- but you still have a good working transmission, engine and battery. That hailstorm could have left the interior and other car components unblemished and untouched. It may be true that older vehicles may have lost significant market value to the point that being deemed “totaled” or salvage, only requires some small fixes. Vehicles recovered after being stolen may get a salvage title without ever having been in a collision. Most of the time a car thief steals a vehicle for a specific part or parts. For example, a 2017 Lincoln MKZ may get stolen, for its eye-catching rims that can fetch some serious cash online. That 2018 Honda Accord may be stolen and then stripped of its electronics, airbags and seats. But the car was never in an accident. So, you may purchase a salvage car, only to input some specific parts that someone else took out.
“OK- What Are The Downsides of Buying A Salvage Car?”
With the pros of buying a car with a salvage title, come the cons. Let’s examine them.
There is No Re-Sale Value
After you buy your salvage, the resale value of the vehicle just about dissolves. You can bet your last bottom dollar that many dealerships will not accept salvage vehicles as trade-in vehicles. Thinking of selling that car privately? You may need to think again. Additionally, salvage vehicles cannot be valued with precise online pricing tools either. Online car pricing guides such as Kelley Blue Book or Edmunds will make it very difficult to convince buyers that you have a quality vehicle to sell.
Hardships with Insurance or Financing a Salvage Car
Before you buy that car with the salvage title, you want to call your desired car insurance company and see if they will insure it. These days, lots of vehicle insurance companies don’t want to insure a salvage title car. And if you do luck up and find one that does offer coverage-chances are the coverage is quite limited. Looking to finance your salvage car purchase at a bank? Good luck with that. Lots of banks and credit unions look at cars with a salvage title as a risk. This is where the good relationship with the salvage car seller comes in quite handy. You may be able to negotiate a good and lower price on that car and take that car off of the seller’s hands, fast.
Dealing with Fraud
Many people who sell salvage vehicles make false claims about them. As a buyer, you want to be aware of this. Sometimes, a person will sell a car with a salvage title- making the claim that the damage was cosmetic or very minor. But it will be difficult to know if that seller is telling the truth. This is why it is important you safeguard yourself and your purchase. You can begin with a vehicle history report, as we mentioned earlier in this article. Also, keep in mind that to some degree, a salvage title also implies that you are receiving the car “as is”. A salvage car doesn’t come with a guarantee or a warranty. Additionally, there may be no legal recourse you can take, since your car has a salvage title.
Safety and Security of Buying a Salvage Car
Are you planning on driving that salvage car? Then you want to be sure that you are driving a safe car, despite you intending to make repairs on it. Reports indicate that many salvage vehicle rebuilders take money and use it to line their pockets- as opposed to equip that car with life-saving components. Yes, some salvage car rebuilders are known for cutting corners when it comes to safety.
Check out this story…
Back in 2003, an 18-year-old guy named Bobby Ellsworth got into a friend's pickup truck and was killed in a collision. Bob Ellsworth who is the father of Bobby, stated that his son would still be alive, only if the truck’s airbags were deployed. But the airbags were stuffed with rags and paper. Additional facts of the unfortunate incident revealed that the truck Bobby was riding in, was in a wreck previously. That time, the airbags were deployed without any issue. However, the auto body shop that purchased the truck Bobby rode in, fixed up the truck and cut corners. They stuffed the old airbags with rags and other materials instead of installing new air bags. The Ellsworth’s family attorney Julia Haus, sued the auto body shop. She also then won a $15 million verdict for the Ellsworth family.
Calculating The Price Of Your Salvage Car
So, now that you want to buy a salvage title car, you can shave off 40% to 50% from the retail cost of the vehicle. This will allow you to get an approximate value of the salvage vehicle. After taking off 50% from the retail cost, you will now have a ballpark figure for your salvage car. The percentage of what to subtract will depend on the actual damage to the vehicle. If you use your compliant insurance company, you can bet that they subtract between 70% and 80% from the retail cost of the vehicle. There is your price for your salvage car.
When it comes to paying for a salvage car, you want to pay a fair price, but of course, you want to keep in mind that the price you pay is substantially lower than if the car title was clean. Ask questions. Obtain paperwork that protects you. Pay money for that salvage car, knowing that you can turn it into something substantial, with care, patience and “opened eyes”.