Salvage Title Drawbacks

While salvaged vehicles can save you thousands of dollars off regular used cars, it may not be the best way to purchase a used vehicle. Salvage titles are given to cars and trucks that insurance companies, for one reason or another, deem a "total loss." The insurance company may determine a vehicle a "total loss" because repair costs are more than the value of the car or truck, or to avoid liability on other types of claims.

State Acceptance

Before purchasing a salvage title vehicle, you should check with your state's department of motor vehicles to find out if they allow salvage title vehicles on the road. Some states will allow them on the road only after they have been fully repaired, inspected and given a "rebuilt" title. For example, Texas will allow salvage title vehicles on the road because they have to be safety inspected annually. After two years of passing inspections, you can apply to have a rebuilt title.

Insurance

While you may find it money-conscious to purchase a salvage title vehicle, your insurance company may not. Once an insurance company deems a car or truck as a "total loss," another insurance company may not insure that vehicle with a salvage title. Also, the title of the vehicle will always show that it is a rebuilt or salvaged vehicle, even if you restore it to 100% running condition.

Damage to the Vehicle

Beware that there are some unethical businesses that will put two salvaged vehicles together as one. These salvaged vehicles usually have shoddy repairs and cause serious problems over time. Consider that the vehicle may have serious frame damage even though the rest of the vehicle looks fine. Frame damage may make the vehicle difficult to repair, and may result in failure to pass a safety inspection.

Bottom Dollar

Salvage title vehicles are best for the individual who plans on keeping the vehicle for several years. Most car dealers will not accept salvage or rebuilt title vehicles as a trade-in. If you try to sell it privately, such as a classified ad or auction, a salvage title must be disclosed to the prospective buyer. Also, if sold privately, a vehicle with a salvage title is not worth as much as one with a clean title.