Buying a used car is usually a straightforward process. However, there are several things to consider when it comes to buying a salvage title used car. Salvage vehicles are an entirely different world compared to the traditional second-hand automobile market.

Needless to say, those who understand the perks of buying salvage cars know what they are getting themselves into. If you want to know what are the pros and cons of buying a salvage car and investing in such, just keep reading further.

What Is a Salvage Title Used Car

Millions of vehicles end up with salvage titles each year. Some of them are beyond repair, but there are also many diamonds in the rough among them. To point out the pros and cons of buying a crashed car from an auto auction, we must explain what a salvage title is first.

Salvage title vehicles have usually been involved in an unfortunate event, such as theft, accident, flood, fire, etc. Needless to say, insurance companies are the main source of the millions of vehicles that are declared “junk”.

When the insurer’s calculations suggest the repair costs for a particular vehicle will be higher than a certain percentage (most often between 50% and 75%) of what the same vehicle is worth in its pre-damage condition, it ends up as a write-off. Auto repair costs are becoming higher, meaning that more vehicles are likely to be deemed a total loss in the following years.

Once the vehicle becomes a write-off, it is retitled as salvage and sent to an auto auction or to a second-hand dealer.

Note that different states have different definitions of what a salvage title means exactly. The reason why there is such a great interest in these auctions is the simple fact that many salvage cars for sale are either in near-perfect condition or they need minor repairs to become road-legal again.

The profit margin may not be bad at all, as there are good deals waiting out there. Still, buying a crashed car is not a walk in the park.

What Are the Pros of Buying Salvage Cars

When someone decides to browse crashed cars for sale, they are probably aware of the pros of such a purchase. Of course, not all cars will result in a hefty profit for the buyer.

This is what you can look forward to:

The Prices Are Often Unbelievably Low

Of all the advantages of buying a crashed car, this is the most tempting one. Most salvage cars for sale have a significantly lower value than equal makes and models with clean titles. The difference can easily reach a staggering 40%.

People who buy salvage cars need to make that comparison before placing their bid. Sometimes, you can find nearly intact vehicles with shockingly good prices.

Purchasing a salvage car in a running condition and with repairable damage for 30% of its usual value is a great deal, no matter how you look at it. A quick repair job might just be enough for the vehicle to pass state inspection and receive a rebuilt title.

There Is Room for Profit

Many people are looking to buy salvage cars with the intention of making them roadworthy and selling them for a profit. With a bit of knowledge about the second-hand automobile market and some patience, this could be a profitable side gig for everyone willing to do it.

Apart from selling repaired salvage cars, you could always part them out. Any car is worth more when sold in parts and finding the right model could also result in a hefty profit. Some car parts are rare and extremely expensive even when they are sold used.

There Is High Value Waiting for You

When scrolling through crashed cars for sale, you can be lucky enough to find a nearly intact car in need of minor or no repairs for a fraction of its usual retail value. It is not unlikely for someone to find such a deal. Theft-recovery vehicles regularly end up as write-offs just like the crashed ones and are often the best deals on salvage auto auctions.

What Are the Cons of Buying a Salvage Car

Picking one of the salvage cars for sale in front of you can have consequences. There are things to consider before doing it.

Here is what you need to know about the cons of purchasing a salvage title vehicle:

Salvage Vehicle Insurance Is Often a Problem

Most insurers will not insure your newly-acquired salvage car. The reason is simple: they would find it hard to distinguish any new damage done to the vehicle from previous damage.

Even if you manage to find an insurance company willing to provide coverage for a salvage title car, it would most probably be partial. The premiums for a salvage vehicle insurance would also be much higher compared to what you’d pay for insuring a clean title car.

The Salvage Title Becomes Part of the Vehicle’s History

In case your repaired salvage title car becomes road-legal again after passing the DMV inspection, it will receive a rebuilt title. The report would also reveal all previous damage done to the vehicle. In other words, the final price you can ask for a perfectly repaired vehicle with a rebuilt title would still be lower compared to a clean title car.

Unexpected Costs Can Ruin Your Good Deal

This is the most important reason why you should inspect a vehicle before bidding on it. There are many cases when salvage cars are in far worse condition then they seem to be. Looks can be deceiving: a nearly intact interior can hide a lot of damage under the hood.

You are always better off double-checking the car’s mechanical state if you have the chance to. Damage to the undercarriage or signs of severe flooding is what you should look out for. Even if the salvage car runs, it could still be nothing but a burden, and you could end up losing money.

What Are the Pros and Cons of Buying a Salvage Car – the Verdict

Wondering if buying salvage title cars is worth the risk? There is a simple answer: it depends.

Yes, it is always a matter of doing the math and checking the facts. If you think that a particular vehicle is worth the repairs and you could handle the additional costs, then simply go for it.

If you’re lucky, there will be no hidden damage and you could earn a profit. There are a lot of success stories, and this business looks nothing but promising.

 

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