Buying a salvage car and getting it restored is always an exciting experience, but what if your hard-earned possession gets involved in an accident. This is a thought that might worry many people who buy salvage title cars for sale. While salvage cars have been declared as total loss by insurance companies, the question that comes to mind is, can there be any claim to make up for the losses if a salvage car gets involved in an accident? Unfortunately, there is no definitive answer to the question as the aftermath will depend upon a number of factors that we will discuss in this blog post. Read on.
What is a salvage car?
Before we delve into complex topics, let’s take a look at what a salvage title car is in general. Not everyone is an expert and some people need this simplified.
As you probably are aware, a vehicle has a title. This is the legal document that connects this vehicle to the respectful owner. Whether this is an individual or a company it doesn’t much matter unless the car is leased.
Nevertheless, there are a couple of different types of titles. These include clean titles, salvage titles, rebuilt titles, junk titles, and lemon titles.
Each of these designations means something different. But for this article, we are interested in learning what a salvage title is.
This salvage title designation is given to a vehicle that was deemed a total loss. So, what does this mean?
Well, this means that the insurance company has decided that this vehicle is not worth fixing and they put the car on the auction.
Once the car is auctioned off this means that they want to recuperate some of their losses on this vehicle.
The insurance company deemed this vehicle a total loss, but sometimes this is not the case. In many of the cases, these cars are rebuildable and can be put back on the road.
If the car gets fixed, it will get a rebuilt title and can be registered for the road.
Overall, salvage title cars should not scare you at all, these cars are repairable. However, each car carries different types of damage. So, there has to be a proper damage estimate before you embark on this journey.
This is a must because in some cases, the repairs can cost a lot more than the overall value of the car. This makes this type of deal totally not worth it. So, you need to train your eyes and know how to estimate an easily repairable salvage car from a not so easily repairable one.
Rebuilding and Inspection
As we noted previously, salvage title cars are cars that are accident damaged cars in many of these cases.
Once they are put in the salvage yard, these cars get a salvage title. A person buys these cars and then he cannot drive the car until repairs are done.
So, what does this mean? Well, this means that the car cannot be registered and put back on the road until repairs are done.
Once the repairs are done, the car has to undergo an inspection in your local DMV. There the technician will evaluate if this vehicle was properly fixed.
If that’s the case, your car will get a rebuilt title. With a rebuilt title, you can register and drive the car.
Insurance Considerations
When it comes to salvage title cars, insuring one can be a very difficult and expensive thing.
This is the case because many insurance companies are hesitant when it comes to these types of cars. There are a limited number of insurance companies that work with salvage cars. This is why you need to be aware of this.
On top of that, these companies will charge you a premium to insure your salvage title car. Salvage title cars have more expensive insurance compared to clean title cars and you should be aware of this when buying one for yourself.
Resale and Market Value
One of the biggest downsides of salvage cars is definitely their poor resale value. Salvage cars tend to have lower resale value compared to clean title vehicles. This resale value is usually 20% less compared to clean title cars, sometimes it can be more.
Another thing to add is the buyer caution. Buyers doubt these salvage cars and even if they want to buy one, they perform very thorough inspections in order to make sure that everything is as it should be.
Pros & cons of salvage cars
Now let’s take a look at the pros and cons of buying a salvage title car and learn more about the positives and negatives of this type of deal.
Pros
Let’s start with the pros. A salvage title car is a great way to obtain your dream car on a budget. If you have a childhood dream car, it is the right time to obtain this vehicle, fix it in your garage, and enjoy it.
Salvage title cars can be found for a fraction of their MSRP and if you want to drive in luxury on a budget, they are the best way to do so. Find a cheap deal that requires very little work and fix it.
What is also good with salvage cars is the fact that you can also make a profit on these vehicles. Especially if you are familiar with how to pick good deals and know how much to bid.
If you perfect this, you will be able to get some of the best deals and turn them into profit once repairing them.
Cons
When it comes to salvage cars, there are also some cons that you have to be aware of.
One of the biggest cons is the poor resale value. Salvage cars are often far cheaper compared to clean title cars. This price can be 20% lower or even more.
Insurance can also be a problem because not all of the insurance companies will be willing to work with you. Also, you will be charged a premium if you decide to insure your salvage car.
Also, buyers are pretty suspicious when it comes to these cars. So, they will definitely perform more checks before they decide to purchase this car from you.
What happens if someone hits my salvage car?
Now let’s take a look at what happens if someone hits your salvage car. In this case, there are two possible scenarios that we will cover in the two following chapters.
The car’s title at the time of accident
This is the foremost factor that will decide the outcome in case a salvage car gets involved in an accident. Being declared total loss, salvage cars cannot be driven on public roads. Even if you get a salvage car completely restored, you have to apply at the local DMV to get the “salvage” title changed to “rebuilt.” If a salvage car is driven on the road without retitling, the compensation will be the least of the owner’s worries. In such cases, consult a lawyer as soon as possible and don’t keep any details from them.
If the car has a “rebuilt” title
If you have got the rebuilt title for your car and it gets involved in an accident that was caused by the fault of the other party, the compensation will depend upon the other party’s insurance company. That said, you need to keep in mind that when a car is given a rebuilt title, its market value depreciates by 20-40 percent. The insurance company of the other party keeps this into consideration when deciding the compensation amount, which may not be enough to completely cover the damage caused to your vehicle.
Salvage Car Accident FAQ
Now let’s answer some frequently asked questions.
What happens if someone hits my salvage car?
It really depends on where the car was hit. Let’s take an example, if the car was hit while transporting it to your location, the car should have been insured. So, the insurance will pay for it.
In case your salvage car was damaged while driving it, things are bad for you. This is the case because you don’t have a legal title for driving the car and no insurance.
In this case, your best bet would be to consult with the lawyer on your future steps. However, since the car is not legally allowed to drive, you will highly unlikely get any money from insurance.
This is why you shouldn’t drive your salvage car on public roads until it gets properly fixed.
What happens if you crash a salvage car?
Crashing a salvage car can cost you a good penny. This is the case because this car is not legal for the roads and a salvage car accident will make you very liable under the law.
If you do something like this, you could get heavily fined on top of the crash damage that your car will get.
This is the case because you drive a car that is not road legal and not safe for you and the people around you.
This is why we don’t advise this by your side since the fines can be very hefty and they can definitely hit your wallet. On top of that, you will lose any chance of recuperating some of the crash damage because the vehicle was not insured properly.
What happens if your car has a salvage title?
When a car gets a salvage title it means that it was declared as a total loss from the insurance company. The insurance company deemed that the car was not economically fixable and they decided to give it a salvage title and list it at an online auction in order to recuperate some of the money lost.
Once the car gets listed on an auction, you will be able to bid on one and if you win this car, you will be able to repair it and register the vehicle.
But what is worth noting is the fact that these cars once fixed have to go to an inspection. Only if the inspector approves, the car will be put back on the road under a rebuilt title designation. And only then will you be able to register the car.
What happens if you drive a salvage car?
Driving a salvage car is not something legal. It can get you in trouble if stopped by the police or in case you crash the car.
This is the case because the car is not road-safe and most importantly, it is not insured. And as we all know, insurance is a must when you drive a car.
The car has to have insurance in order for you to drive it on public roads. Just imagine crashing your salvage car into a really expensive car. In this case, you will have to pay tens of thousands of dollars from your own pocket. That’s why you should not drive salvage cars on the road.
How can a car have a salvage title but no accident?
Cars can be deemed a salvage without having suffered any accident. Instead, there can be other problems.
For example, undercarriage damage, biohazard vehicles, flood vehicles, smoke-damaged vehicles, theft recovery, etc.
All these vehicles can get a salvage title without actually crashing and having visual damage to the body.
The Bottomline
In the light of all that we have discussed so far, it would be safe to say that if you are planning to buy a salvage car and get a rebuilt title, make it a point to drive it safely as any mishap can result in serious financial loss, if not anything worse. If you are looking to buy salvage title cars for sale, look no further than AutoBidMaster, one of the leading online auto auction platforms, which gives you access to the largest auto auction inventory in North America. Register with us to buy salvage cars at unbelievably low prices. If you have any questions about our car auctions in New Jersey, simply call: +1 (503) 298-4300(Monday through Friday, 5:00 AM to 4:00 PM) or or click here to connect with our support team.
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