No, it is not worth buying a car with a salvage title because cars with salvage titles can be difficult to insure and are generally not eligible to be financed. A car that has a salvage title has previously been declared a total loss, so it may also require costly repairs before you can drive legally.
Before a salvage-title car can be legally driven, it must be repaired fully and inspected by a certified mechanic. They will review the insurance adjuster’s appraisal report to understand what the original damage was and ensure that all repairs have been done in full. Then, a new title must be issued – a rebuilt title, signifying that the vehicle is safe to drive.
What to Know About Buying a Car with a Salvage Title
Cars with salvage titles tend to be very cheap to buy.
Salvage vehicles can be bought at auctions or from certain used car dealers.
It is unlikely you’ll be able to finance a salvage-titled vehicle.
Insurance companies are hesitant to insure salvage-title cars.
If the vehicle now has a rebuilt title, it has been repaired and can be driven legally in most states.
The downsides of a salvage title are that it's harder to find insurance and repairs could be costly if you want to get the car road-legal again. A salvage title means the vehicle was declared a total loss by an insurance company as a result of damage that would cost more than the vehicle’s value to repair.… read full answer
Why Salvage Titles Are Bad
Vehicles with salvage titles usually cannot be financed.
Most insurers will only offer minimum coverage for salvage-titled cars.
Repairs can take a long time and be expensive to complete before a salvage-titled vehicle is safe to drive.
A salvage-titled car requires a full inspection by a certified mechanic and a new title before being legal to drive.
Vehicles with salvage titles are worth 20% to 40% less than comparable used cars with clean titles.
Positives of Salvage Titles
Not everything about a salvage title is bad. In fact, salvage titles are a useful tool for both consumers and DMVs to understand a vehicle’s past. Additionally, because salvage-titled cars are worth less than their clean-titled counterparts, they are very cheap to buy at auctions or even from some used car dealers. Plus, once the vehicle is repaired and inspected, it is issued a rebuilt title and can be driven legally in most states.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by WalletHub. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.