Salvage Titles vs Rebuilt Titles
#1
07-26-2015, 10:24 AM
Salvage Titles vs Rebuilt Titles
I found these two articles on BoldRide
Should You Buy a Car with a Salvage Title?
“What is a salvage title?” is a frequent question I hear as someone who has been writing about used cars for almost eight years. (Automotive writing is not all fast cars and glamorous auto shows.) Depending on your point of view, a salvage title can either be a blessing or a curse.
Here’s a basic definition of a salvage title: it’s the designation given by a state to a car that has been significantly damaged in a collision or by Mother Nature. Just to further complicate things, some states will assign salvage titles to cars that have been stolen, even if they’re returned in relatively pristine condition.
Most states agree a salvage title will be given to a vehicle that gets damage exceeding 75 percent of its value. (An insurance company might total a car for damage less than that.) A $20,000 car with $15,000 worth of damage is going to get a salvage title when the insurance company takes the title back from you.
So, when is a salvage title a blessing? When you find a car that can be returned to good, working order for less than buying a used one with a clean title. For example, a 2008 Nissan Maxima in good condition with a clean title and 100,000 miles is worth about $9,000 give or take. Say you could pick one up with a salvage title for $3,000 and fix it up. Then it’s a blessing, especially because most states will give it a rebranded title if you can show the work has been done and it passes inspection.
When can a salvage title be a curse? Primarily when you don’t know the car has one. That happens with something called title washing. As Carfax reports, “Professional con men illegally alter vehicle documents to get title brands such as ‘salvage’ or ‘flood’ removed from a car’s title. They’ll often patch up the wrecked cars, move them to other states and sell them with a clear title to unsuspecting buyers.”
By Carfax estimates, in 2014 there were 800,000 cars on the road that had salvage titles that had been illegally converted to clean titles. Often, it is as simple as taking a vehicle with a salvage title, fixing it up, and getting it inspected in another state.
Should you buy a car with a salvage title? If you are mechanically savvy, the answer is a qualified yes, especially if you plan to run the car into the ground. You’ll have trouble selling it with a salvage title history.
Are you lacking in mechanical skills? Avoid a used car with a salvage title. It will be nothing but a headache.
Understanding a Rebuilt Title and How It’s a Good Thing
Buying a used car can be a nerve-wracking experience. After all, as the saying goes, you are buying somebody else’s problems. However, a used car with a rebuilt title isn’t necessarily one.
Let’s take a moment to understand what a rebuilt title is and how it can be a good purchase for a used car. Understand, as always, it’s only a good purchase if the price is right.
A rebuilt title is given to a used car that was deemed salvaged. We explained salvage titles in a previous post. Basically, it’s a car that has been significantly damaged to the point where an insurance company says it’s not worth repairing.
However, if you’re handy and do your own repairs, a used car with a salvage title can be a great deal. You should be able to acquire one for at least 50 percent of its trade-in value.
A major problem with salvage titles is most buyers aren’t willing to buy a used car with one. That’s where rebuilt titles come in. In effect, you take a car with a salvage title, do documented repair work, and have it pass a state inspection.
Once that’s done, the state will issue you a new title that states the car has been rebuilt. It no longer has the salvage title associated with it.
So, why are cars with rebuilt titles possibly good deals? There is documented work that they have been repaired. Make the seller show you the same paperwork he or she used to get the new title. No legitimate seller won’t have copies. You can then use the paperwork to have your mechanic inspect the car just to verify the work that was done still exists. For example, an unscrupulous person could add new parts, get the new title, and then remove the parts.
Once the work has been documented, you know you have a good vehicle on your hands. It’s important to get that inspection done if you’re not mechanically adept. Frankly, though, if you can afford a used car without a rebuilt title, it’s always going to be easier to sell the car down the road with a clean title. Rebuilt titles work best if you plan to keep the car until it dies
Should You Buy a Car with a Salvage Title?
“What is a salvage title?” is a frequent question I hear as someone who has been writing about used cars for almost eight years. (Automotive writing is not all fast cars and glamorous auto shows.) Depending on your point of view, a salvage title can either be a blessing or a curse.
Here’s a basic definition of a salvage title: it’s the designation given by a state to a car that has been significantly damaged in a collision or by Mother Nature. Just to further complicate things, some states will assign salvage titles to cars that have been stolen, even if they’re returned in relatively pristine condition.
Most states agree a salvage title will be given to a vehicle that gets damage exceeding 75 percent of its value. (An insurance company might total a car for damage less than that.) A $20,000 car with $15,000 worth of damage is going to get a salvage title when the insurance company takes the title back from you.
So, when is a salvage title a blessing? When you find a car that can be returned to good, working order for less than buying a used one with a clean title. For example, a 2008 Nissan Maxima in good condition with a clean title and 100,000 miles is worth about $9,000 give or take. Say you could pick one up with a salvage title for $3,000 and fix it up. Then it’s a blessing, especially because most states will give it a rebranded title if you can show the work has been done and it passes inspection.
When can a salvage title be a curse? Primarily when you don’t know the car has one. That happens with something called title washing. As Carfax reports, “Professional con men illegally alter vehicle documents to get title brands such as ‘salvage’ or ‘flood’ removed from a car’s title. They’ll often patch up the wrecked cars, move them to other states and sell them with a clear title to unsuspecting buyers.”
By Carfax estimates, in 2014 there were 800,000 cars on the road that had salvage titles that had been illegally converted to clean titles. Often, it is as simple as taking a vehicle with a salvage title, fixing it up, and getting it inspected in another state.
Should you buy a car with a salvage title? If you are mechanically savvy, the answer is a qualified yes, especially if you plan to run the car into the ground. You’ll have trouble selling it with a salvage title history.
Are you lacking in mechanical skills? Avoid a used car with a salvage title. It will be nothing but a headache.
Understanding a Rebuilt Title and How It’s a Good Thing
Buying a used car can be a nerve-wracking experience. After all, as the saying goes, you are buying somebody else’s problems. However, a used car with a rebuilt title isn’t necessarily one.
Let’s take a moment to understand what a rebuilt title is and how it can be a good purchase for a used car. Understand, as always, it’s only a good purchase if the price is right.
A rebuilt title is given to a used car that was deemed salvaged. We explained salvage titles in a previous post. Basically, it’s a car that has been significantly damaged to the point where an insurance company says it’s not worth repairing.
However, if you’re handy and do your own repairs, a used car with a salvage title can be a great deal. You should be able to acquire one for at least 50 percent of its trade-in value.
A major problem with salvage titles is most buyers aren’t willing to buy a used car with one. That’s where rebuilt titles come in. In effect, you take a car with a salvage title, do documented repair work, and have it pass a state inspection.
Once that’s done, the state will issue you a new title that states the car has been rebuilt. It no longer has the salvage title associated with it.
So, why are cars with rebuilt titles possibly good deals? There is documented work that they have been repaired. Make the seller show you the same paperwork he or she used to get the new title. No legitimate seller won’t have copies. You can then use the paperwork to have your mechanic inspect the car just to verify the work that was done still exists. For example, an unscrupulous person could add new parts, get the new title, and then remove the parts.
Once the work has been documented, you know you have a good vehicle on your hands. It’s important to get that inspection done if you’re not mechanically adept. Frankly, though, if you can afford a used car without a rebuilt title, it’s always going to be easier to sell the car down the road with a clean title. Rebuilt titles work best if you plan to keep the car until it dies
Last edited by P343; 07-26-2015 at 10:29 AM.
#2
07-26-2015, 12:16 PM
Great articles Barbara, thanks for the information. The author's comments about buying a rebuilt car are definitely worth noting. I've seen a few really nice Monte's on Craigslist with great prices, but they just sit there. Nobody want's something that's next to impossible to sell. It's as though there was Anthrax on the title, but if you plan to keep it to it's grave then it could be a good deal.
I recently had a first hand experience with this when I sold an '01 SS to a junk yard. When I turned over the title to the flatbed driver I asked what happens to the title now?
His explanation may vary from state to state, but in Washington the Salvage broker must report the sale to the state and the title will be branded "Salvage". Once that brand is applied the vehicle is no longer considered road worthy, and can never again be granted a registration certificate.
He also explained, a vehicle can be rebuilt twice, but must pass state inspection after each rebuild. After that, it gets a salvage stamp on the title.
One more piece of information he offered is about the criteria of running a salvage yard business. In the past, a lot of stolen cars were stripped then sold to junk yards. The state is cracking down on this with inspectors who make random appearances and request documentation for any vehicle on the premise. Big trouble or shut down if they can't produce.
I recently had a first hand experience with this when I sold an '01 SS to a junk yard. When I turned over the title to the flatbed driver I asked what happens to the title now?
His explanation may vary from state to state, but in Washington the Salvage broker must report the sale to the state and the title will be branded "Salvage". Once that brand is applied the vehicle is no longer considered road worthy, and can never again be granted a registration certificate.
He also explained, a vehicle can be rebuilt twice, but must pass state inspection after each rebuild. After that, it gets a salvage stamp on the title.
One more piece of information he offered is about the criteria of running a salvage yard business. In the past, a lot of stolen cars were stripped then sold to junk yards. The state is cracking down on this with inspectors who make random appearances and request documentation for any vehicle on the premise. Big trouble or shut down if they can't produce.
Last edited by plumbob; 07-26-2015 at 12:31 PM.
#4
07-26-2015, 01:26 PM
Join Date: Apr 2010
Location: Mentor, Ohio
Posts: 12,156
One thing I find interesting and don't fully understand (not mentioned in this article, as I believe it's a state of Ohio thing).
- Some cars get a new VIN when they are resurrected from being a salvaged car.
- Other cars keep the same VIN, but the verbiage on the title (such as the manufacturer) is changed to indicate it was previously salvaged.
I bought my '04 Grand Am knowing it was a rebuilt car. Previous owners bought it the same way (from the guy who rebuilt it). And it has a different VIN riveted by the state of Ohio in the door jam.
Yet, a guy on my street bought one of his cars back from insurance, fixed it, had it inspected, still uses the original VIN.
I can't find any real reason for this.
One other thing I learned (and I feel this is crap). Many insurance companies do not want to provide full coverage to rebuilt cars. The justification is "we have no idea who did the work, how reputable the work was, the car is therefore considered 'high risk'".
In the case of my current Grand Am, I have done enough work and inspection on it to feel very comfortable, it was all reputable and as good (or better) then industry standards for repairing a car.
Now, take my Monte.... It was in a hit-n-run a few years back and it took two body shops to finally make me happy. The first one (recommended by my insurance) was leaving broken stuff left and right. This is a reputable repair?
Or, how about the times an insurance company cuts the owner a check and says "take it where you want or do the work yourself" and the owner never gets the work done.
So insurance companies trying to claim a rebuilt car is "high risk" should do that to ANY car that gets into an accident. You never truly know the quality of those repairs, period.
- Some cars get a new VIN when they are resurrected from being a salvaged car.
- Other cars keep the same VIN, but the verbiage on the title (such as the manufacturer) is changed to indicate it was previously salvaged.
I bought my '04 Grand Am knowing it was a rebuilt car. Previous owners bought it the same way (from the guy who rebuilt it). And it has a different VIN riveted by the state of Ohio in the door jam.
Yet, a guy on my street bought one of his cars back from insurance, fixed it, had it inspected, still uses the original VIN.
I can't find any real reason for this.
One other thing I learned (and I feel this is crap). Many insurance companies do not want to provide full coverage to rebuilt cars. The justification is "we have no idea who did the work, how reputable the work was, the car is therefore considered 'high risk'".
In the case of my current Grand Am, I have done enough work and inspection on it to feel very comfortable, it was all reputable and as good (or better) then industry standards for repairing a car.
Now, take my Monte.... It was in a hit-n-run a few years back and it took two body shops to finally make me happy. The first one (recommended by my insurance) was leaving broken stuff left and right. This is a reputable repair?
Or, how about the times an insurance company cuts the owner a check and says "take it where you want or do the work yourself" and the owner never gets the work done.
So insurance companies trying to claim a rebuilt car is "high risk" should do that to ANY car that gets into an accident. You never truly know the quality of those repairs, period.
#5
07-26-2015, 01:57 PM
You would think something like vehicles would have the same rules in each state but then each state also makes up their own rules when it comes to vehicle inspections, speed limits, window tint, etc.
#7
07-26-2015, 08:12 PM
Join Date: Apr 2010
Location: Mentor, Ohio
Posts: 12,156
Buying any car that was in ANY accident comes with a level of risk and change in value. But when looking at a salvage car that was resurrected, a good portion of the time, all it translates to "the cost of repair was not worth it given it's current value".
The guy on my street that bought his car back from insurance and had it re-instated, the only problems were cosmetic, bumper cover, fender and I think the hood and headlight (no air bag deployment). I saw the work he was doing. Crazy minor stuff, but given the car was older, despite how clean it was, the value was not there to justify insurance doing that work.
The '04 Grand Am I bought, I know that's cars way too well and gave it a complete run through. Knowing the car was totaled after it was 2 years old means that it probably has a lot of area to inspect for damage.
Honestly, I argue anyone to look at that car and tell me it's not in primo shape. It drives straight and runs perfect. Admittedly, I wish I knew more of it's story (why was it totaled). I believe I know all the work that was done to it and I'm confused, but still happy with it.
For me, the deal has to be "right" for me to consider it (normally I would walk away due to the amount of time to inspect the car).
Thread
Thread Starter
Forum
Replies
Last Post
Space
Engine/Transmission/Performance Adders
1
09-07-2008 07:54 PM