WalletHub, Financial Company
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.
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.
To learn more, check out WalletHub’s guide to salvage-title vehicles.
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