What are the cons of a salvaged/reconstructed car title?

Question

A lot of the used cars I've seen for sale do not have clean titles to them. If it's not clean, what does it mean for the car and insurance stuff?

Answer 1

It could cause insurance problems. I don't know the rules about that. But I do know that it lowers its resale value. There are steps you can take with the state though to get the title cleared. I don't know what the rules are, but I am sure if you call the courthouse they could give you more information about that.

Answer 2

It means you usually cannot get full coverage insurance (comprehensive and/or collision) only liability.  

This means it is not a good idea to own a salvaged car unless it is really, really cheap.

It also means that you probably won't be able to get financing, since car loans usually require that you be able to carry full insurance on the car.  

You should NEVER buy a car that was salvaged within its first few years.  If the car wasn't at least 6 or 7 years old when it was salvaged, forget it.  The more valuable a car is, the more damage it takes to get that salvage title.  (For example, a lot of the severely damaged Ferrari Enzos you see pictures of could be repaired below the threshhold where they'd need a salvage title)  

If you don't know when it was salvaged and for what, you don't know how big a deal the damage is.  That uncertainty makes salvage vehicles worth far less than non-salvage.  

Oh, and some states brand flood vehicles as "salvage."  You DO NOT EVER want one of those unless it's been completely torn down and rebuilt with new electronics.

Answer 3

The cons:

If it's newer avoid, an older car is easily salvaged with only cosmetic damage, a newer car with a salvage title could have sustained over $15k in damage and that's major.

If you don't know why it was salvaged, avoid. Before and after pics are vital. Don't take the seller's word for anything; just like buying any used car - have an independent inspection by a pro.

If it was salvaged due to flooding AVOID big time. The car will never be right and a lifetime of quirky electrical problems will ensue.

Insurance is not that big a deal. You can get full coverage, depending on your insurer but keep in mind that a salvage car has diminished actual cash value (roughly 40% less than a comparabale clean titled car) and you will be paid less if it's stolen or totaled a second time.

Pros:

If it's salvage due to theft recovery go for it! That's typically the best kind of salvage you can get, provided the thief didn't trash it.

Salvage cars go for 40% less (don't pay more than that!) and if it's an older reliable car like a Honda or Volvo you could get a fine car for lots less. Make sure you run a Carfax to find out why/when it was salvaged and get  a pre-purchase inspection. And drive it til you get your money's worth out of it cause they are harder to re-sell.

I have owned two salvage cars and they have been terrific cars and great values. If the repair work has  been done right, and the price is right, what's the big deal?

Keep in mind this food for thought: a new car gets rear-ended and sustains $5k in damage - it gets to keep it's clean title. An older car with the same damage would get a salvage title. SAME DAMAGE, DIFFERENT TITLE. A clean title, therefore does not mean a clean car!

Oh, and despite what you hear, once a salvage brand is given to a car it remains as such. There are illegal ways to "titlewash" and get a clean title but no legal way whatsoever.

Answer 4

You cannot get "full coverage" thats one of them...