What Is a Salvaged Title?

A car’s title will provide all sorts of information about your vehicle. You’ll see the car’s make, model, and odometer reading at the time of the sale. When it comes to car buying, it’s important to know what kind of title it will come with. 

Will it have a clean one, or will it come branded as salvaged, which will alert you to the fact something serious has happened to it? What is a salvage title, and what are the advantages and disadvantages of purchasing one?

What does a salvaged title mean?

Driver's license and vehicle title paperwork sent by mail
Driver’s license paperwork | Peter Dazeley/Getty Images

This kind of title alerts potential buyers that the car in question has had some kind of severe damage in its history. You’ll want to find out what has happened to it, what all was damaged, and decide whether you want to take the risk of driving it or not. 

According to Nexstar, to get a salvaged title, a vehicle will have had a collision, flood damage, or might have been stuck in a bad hail storm. An insurance agency will total the car, take it and sell it at auctions, where body shops will pick it up.

The vehicle will need to have a branded salvage title attached to it as per federal laws that protect consumers. This lets an informed buyer be aware of the damage and the risks that could be associated with it. This way there will be no surprises if something happens down the road.

What are the disadvantages of buying a vehicle with a salvaged title?

Buying a car with a salvaged title offers many serious safety risks. If it’s been in a front-end collision, there could be damage to some of the important parts of the car located in the front end, like the radiator, for example.

Repairs may have been made, but it’s possible that they might not have been done right. You could end up spending tons more repairing the vehicle after buying it. Another risk is that it will have a low resale value due to the damage. You wouldn’t get as much for a trade-in on a new vehicle or get much in a sale if you tried to sell it outright.

There’s a good possibility that you might not be able to get financing due to the safety risks of the vehicle. You might not be able to get insurance for a car with a salvaged title on it either. Some insurance agencies will provide coverage, but they often limit what they will cover and offer it at a high premium. 

The benefits of purchasing a car with a salvaged title

Cars that have a salvaged title are great opportunities for body shop owners or mechanics. They can use the vehicle for parts to repair other cars. If you’re good at fixing cars, you can spend some time tinkering with a car like this, getting it back into driving condition. 

The biggest benefit to owning a car with a salvaged title is that it will sell for much less than what it would if it had never had any damage done to it. You could get a relatively new car for a couple of thousand dollars, depending on the damage and the work done to it.

Salvaged titles could pose a lot of risks, or they could be a blessing in disguise. Insurance companies can total cars for significant damages or minor cosmetic ones. Just be sure to do your research and know what kind of salvaged vehicle you’re getting. 

RELATED: Can a Car With a Salvage Title Be Insured?