If you are a bargain hunter, and you do not have a salvage title vehicle, you are missing out. Unsurprisingly, some people are unaware that their super affordable car has a salvage title, and most of them do not even know what a salvage title is.
A vehicle will receive this salvage title when the insurers deem it too expensive to repair or, in other words, a total loss. Though this legal definition varies by state, the total loss is declared when the vehicle’s cash value is equal to or less than the estimated cost of repairs. The insurer issues a salvage title, writes a check to a car’s owner, and ultimately owns that vehicle. Then, these salvage title cars will often be sold at auctions at really affordable prices.
In other words, if you purchase a damaged car for an unbelievably low price, your car has a salvage title. One major difficulty when it comes to owning a salvage title car is that insurers will not insure them probably. Nevertheless, keep scrolling for some salvage car insurance tips for the best bargain hunters out there.
Advantages and Disadvantages of a Salvage Title Car
Understandably, purchasing an “irreparable” vehicle has only one advantage—it is very affordable. And this is what usually appeals to bargain hunters.
To them, it is no problem. In fact, they see it as a challenge. It is way more affordable than having to pay for a regular car, whose insurance alone is $1,548 a year, on average.
However, there are a few disadvantages that you should watch out for. First and the most obvious one, your damaged car might look good on the outside, but might not work on the inside. Secondly, this salvage title will be connected to your vehicle forever, so selling it will be tough. Unless, of course, you are a master salvage vehicle repairman who can make the car run as before, but this is highly unlikely. Finally, you will not get your vehicle insured as most insurers are not keen on providing such car insurance. They will either not give you car insurance or will charge higher premiums.
Tips for Insuring a Salvage Title Vehicle
- To ensure that your salvage title vehicle is eligible for insurance, you need to lay some groundwork before purchase. You should find out the vehicle identification numbers and do some research on the car and seller if possible, beforehand. Salvage titles vary from one state to another, which means that if the car was totaled in one state, it could be driven to another state to get a clean title. A clean title can worth significantly more, but it is considered fraud. Therefore, doing some prior research can help you make the right decision.
- Since 33% of car insurers do not offer policies for salvaged vehicles, the good idea is to look for cars being sold by insurers. Doing so will ensure that your vehicle has the necessary and sufficient documentation, such as photographs and detailed descriptions of the damage. If you simply buy a salvage-title vehicle off a random site online, it is not guaranteed that you will have every document you need.
- There are many reasons why a salvage vehicle gets the title, such as accidents, natural disasters, etc. If it was totaled due to natural disasters, it might be harder to get it insured, so it is good to have all the information. This is because insurance companies know that car dealers can repair the car on the outside and make it look new without repairing it on the inside. If your salvage title is for minor damage and not for severe damage, your chance of getting your vehicle insured is higher.
- If you manage to get your salvage car insured, it is unlikely that you will get comprehensive insurance. This is because comprehensive insurance extends to include situations beyond accidents. Collision insurance will also be challenging. What you will be getting is liability insurance. Liability insurance will protect you, the owner, in the event of an accident where you injure someone else or damage property.
- You need to collect full documentation to buy car insurance for salvage cars. These documents include VIN, and in some cases, the insurer might request an inspection. This inspection can either be done by the insurers themselves, or a dedicated mechanic. Some insurers also require a vehicle appraisal. So, make sure you have the necessary documentation beforehand.
- Another important thing to know is that you will not be paying less for your car insurance if you do get one. Although your salvage title car is worth less, insurers add surcharges to protect themselves. They will not consider the value of your totaled car, but the year when it was manufactured and a model of the vehicle. Essentially, you will be paying the same amount as you would normally do.
- Moreover, your car will start off at the lowest price. Insurance pays out according to your vehicle’s value, and you will get less reimbursement if your salvage title car has another accident in the future. The insurers usually have the upper hand in these negotiations.
- Understandably, a salvage vehicle will require more work in general, not just when it comes to insurance. You should be physically and mentally prepared to face whatever mechanical challenges that may arise. Also, make sure your repairs do not end up being more expensive than buying a brand new vehicle.
While many people would advise against purchasing salvage title vehicles, bargain hunters just cannot keep their hands off a good deal. Moreover, it is not impossible to find insurance companies that are willing to cover salvage title cars, it is just slightly more difficult. Nonetheless, bargain hunters are always up for the challenge. And honestly speaking, if you have the right plan and right mindset when you are planning the purchase, you might end up with a better deal than everyone else.
Guest post courtesy of Maja Talevska