If, like me, you were raised by bargain hunters, coming across a dirt cheap car might just be your dream come true. But a deal can come with downsides.
As it turns out, we hear from plenty of drivers who don’t know that the super low-cost vehicle they’ve just bought has a salvage title — or who don’t know what a salvage title is at all. Perhaps worse, some drivers who are familiar with salvage titles are surprised to find out while insurance shopping that they own one.
What is a salvage title and how can you figure out whether your car has one? Let’s dig in.
What is a salvage title?
A salvage title vehicle has a history — typically a pretty unhappy one. Salvage title vehicles have sustained serious damage (usually in the form of a gnarly accident) and have been deemed “total losses” by their respective owners’ insurance companies. When a vehicle is considered a total loss, it means the extent of the damage is so bad that: (a) the cost of repairs exceeds the car’s actual cash value prior to the accident; (b) the cost to repair the car exceeds a certain threshold percentage, determined by state regulation, or c) it’s unsafe to repair.
You can end up with a salvage title if you buy a used car that has one or if your car was seriously damaged in an accident.
The pros and cons
If you see the words “salvage title” on a used car listing, you’ll ultimately be taking a risk. Here are a few cons to consider — along with one significant pro.
Con: You just can’t be sure. In many cases, a vehicle can look perfectly fine on the outside and have jaw-dropping damage under the hood and beyond.
Con: You’ll have a salvage title for the long haul. A salvage title is essentially a salvage title forever, even though it’s technically rebranded as “rebuilt” once the DMV approves all repairs and deems it safe to drive. Selling can be a challenge.
Con: Insurance coverage could be an issue. Insurers just can’t tell what’s going on under the hood of your car. Insurance companies are generally cautious. Some just don’t cover salvage titles; others charge extra for the risk.
Pro: That price tag — enough said. You can get a serious deal if you’re okay with taking a gamble, so for die hard bargain hunters, this pro might be worth all the possible cons.
So, How Can I Tell?
Believe it or not, we regularly hear from drivers who incorrectly believe their title is clean. Any chance you’re not 100% sure of your car’s status? A few quick ways to check:
- Get a vehicle history report. Take your VIN to Carfax, AutoCheck, or another provider and pull the vehicle’s history. This costs a few bucks, but might be worth it for the peace of mind. If you don’t want to pay, it’s possible your state’s DMV can check the status for you, too.
- Find an independent mechanic. It’s a good idea to do this before buying any used car, but better late than never when it comes to having your car inspected. A mechanic can safety check your car, and may have access to information you don’t about its history.
- Look at the physical title. Most of us don’t often look at our physical titles, but finding the status of yours might be as simple as pulling it out of that closet or drawer that holds important documents.
Still car shopping? If you could use some expert guidance on insurance during the process, feel free to get in touch.
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Michelle Konstantinovsky is a San Francisco-based freelance journalist, UC Berkeley alumna, and Metromile customer.