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Salvage Title Meaning: When Low Cost Turns into Troubles

A salvage title is an official indication that a car has been involved in a serious accident, and an insurance company has considered it a total loss and took a reposition. Typically, a vehicle must lose 75% or more of its market value. While many salvage-title cars never get repaired, some end up refurbished and back on the market. Today, we prepared a quick guide on the salvage title to help you decide whether it is worth buying such a car. 

Note: By Indiana laws, before a car with a salvage title can be legally driven, it must be repaired and inspected by a certified mechanic. They will review the insurance adjuster’s appraisal report to check the original damage and ensure that all works have been done in full. Then, a rebuilt title must be issued, signifying that the car, SUV, or truck has been damaged but now is safe to drive.

What Does a Salvage Title Mean?

A vehicle with the salvage title typically has little financial value, but this isn't always the case. Categories of salvage title vary on a state-to-state basis, but in general, this type signals that the car has been damaged in one of the following ways:

  • Collision damage in an accident;
  • Fire or flooding damage;
  • Stolen and returned with missing parts;
  • A former heavily-used taxi or law enforcement vehicle;
  • An auto returned under a warranty.

Is It a Good Idea to Buy a Salvage Title Car in Indiana?

The most evident reason why buyers consider this option is the price. These cars are not in great demand, and few people have enough skills and patience to restore them. If you are a trained or amateur mechanic enjoying DIY repairs, a car with a salvage title may be a good choice for you. Even if the car is unreliable to drive, it can still be a treasure trove of parts. This is especially true if you are looking for hard-to-find old model parts. 

As for an average US motorist, the practice shows that this branded title means more troubles than benefits.  

Vague Vehicle History

A salvage title increases the risk of getting a vehicle with considerable damage. Without a detailed history report, you never know if the car got this mark after a flood or was stolen and then returned. It is also vital to check if the previous owner maintained the vehicle properly, as even missed oil changes bring an additional risk for a breakdown.

Financing Issues

Most financial institutions are generally reluctant to finance salvage cars. Such vehicles have no KBB value, and their price is hard to estimate. You may get a personal loan, but the interest rate will likely be higher, and you will have to pay it off sooner than a traditional used car loan.

Little Insurance Coverage

You can’t get much damage coverage because a salvage car is already considered low-value. Such vehicles do not qualify for high compensation if involved in an accident, and you may have to pay more for insurance. Also, these autos may not have safety features that insurance companies deem safe, such as manufacturer airbags, meaning an extended warranty is not your option either. You will have to pay for all future repairs from your pocket. And the chances are high that your car will need additional refitting shortly. For example, a replaced door may not align with the body, and any impact may force you to pay for door repairs again.

More serious issues can appear with the flooded vehicles. Initially well-looking, they can have problems with electronics, which can occur in different places at once, and are very expensive to diagnose and repair.

Safety Concerns

You can never be certain of the salvage-title car’s safety. It’s simple to diagnose the missing airbag, but what if the bags are in their place, but not functioning properly? The only way to secure yourself is to contact a qualified mechanic for a detailed professional inspection of all the compartments to avoid safety issues in the future.

Hard to Sell or Trade

Selling a salvage car to a private party can turn out to be a real headache. You will have to find someone ready to invest time and money in repairs, while most buyers are looking for a vehicle to drive away in. Dealerships aren’t likely to accept a salvage car due to low value and associated risks.

Occasionally, you might come across a car with a salvage title, priced well below its value, without any serious repairs required. However, these cases are rare, and you must have a well-trained eye. 

A beneficial car purchase does not necessarily mean risks – visit the Indy Auto Man dealership and choose a reliable yet affordable used vehicle from the rich inventory. Find out more about our financing and trade-in offers and get your best deal!