What is a salvage title on a used car and why should I be careful with it?

The cars title salvage are those who were involved in accidents that severely damaged its structure and became a hazardous or unfit to be driven on the road transport.

When a vehicle has been involved in a severe or serious accident (also in floods or another natural disaster) the adjuster of an insurance company will declare it as a ” total loss “, since the cost to repair it exceeds the value of the vehicle as a whole.

Only a person who works for the insurance company and who assesses the status of the damage, can declare a vehicle as total loss, and a special title is assigned to the vehicle called “salvage title”.

However, these cars can be repaired and put back on the streets once they go through a series of reviews by the appropriate department of vehicles.

If you are thinking of buying a car with this type of title, you should not forget any detail and you should review it thoroughly. So here are some things you should know before buying a salvage vehicle .

1.- Resale or exchange value

A vehicle with a salvage title will not have the same resale value as one with a clean title. That adds to the fact that you will likely have to hold hands with the prospective buyer to cover the vehicle’s condition and history, The Drive said in an article.

2.- Car insurance

Some companies if they will cede to cover a car, they will definitely not be able to offer more than the simple coverage or that required by law, since a higher coverage would force them to pay the original value of the car, which was lost when it was declared. as salvage .

3.- Vehicle history

A pre-purchase inspection can clear up many of those questions and can also give you an idea of ​​the severity of the damage to the vehicle.

4.- Financing

Your bank or credit union may not be as excited about financing a salvage car . Financial institutions first want to make sure you can repay the loan as promised, but they are also concerned about the value of what they are financing. Salvage-titled cars can have volatile resale values, meaning banks may not get all of their money back if you default, The Drive reported .

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