For example, Minnesota salvage title laws say a salvage title is required for each of these situations. Flooding, fire, vandalism, theft and other major events like hail storms can also result in damage that warrants a salvage title, depending on the state.
But your safety could still be at risk. Even if a car has been completely rebuilt, it may not have been repaired well. Dishonest auto sellers may apply for a new title for the salvage vehicle in a different state or withhold information on a new title application.
You may have trouble insuring a car with a salvage title, even if the car has been repaired and issued a rebuilt title. This can result in a lower resale value. Only some auto insurance companies offer coverage for vehicles with rebuilt titles. And among those that do, coverage options may be limited. Salvage vehicles are usually much cheaper because of their title status.
To prove that a vehicle with a rebuilt title is insurable, you may be able to provide more information to your insurer. This includes a statement from a professional mechanic indicating that your vehicle is in good working condition, pictures that show the its present condition and repair receipts, which is a given when you purchase a vehicle with a rebuilt title.
One advantage of vehicles with a salvage or rebuilt title is that they generally cost much less than those with clean titles. On the other hand, purchasing a car with a rebuilt title can lead to more costs in the long-term if the repairs previously made were not up to par.
When you purchase a salvage rebuilt vehicle, you are accepting that extensive damage has occurred to the vehicle. In some cases, there may still be undisclosed or unseen damages that could arise at a later date. Likewise, even if the vehicle has been fully repaired, you may have trouble finding insurance coverage for the car. In many cases, those carriers who insure vehicles with a rebuilt title may charge the same premium as a similar vehicle with a clean title, even if your vehicle is worth much less.
Each state has its own regulations, with some being more stringent than others. If you are an experienced mechanic or know one who can do great work inexpensively, then a salvage titled vehicle could be a great buy. In a few states like Ohio, something as innocuous as an abandoned vehicle could earn the salvage title distinction.
Next, see if you can determine who did the repair work and the quality of their work. Taking these steps will help make the process smoother if you are interested in purchasing a vehicle with a rebuilt title.
How We Make Money. Grace Kim. Written by. She has …. Edited By Amy Sims. Edited by. Amy Sims. Amy Sims is a senior editor for Bankrate, leading a team responsible for creating educational insurance content. Reviewed By Mark Friedlander. Reviewed by. Mark Friedlander. Director of corporate communications, Insurance Information Institute.
Mark Friedlander is director of corporate communications at III, a nonprofit organization focused on providing consumers with a better understanding of insurance.
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To help you have a better understanding of what each title means, here is a closer look at both:. Read more From Grace.
Salvage title vehicles are one of several titles a car can be given. A salvage title means that a vehicle has been in an accident, but not just an accident, one which has caused severe damage to the vehicle.
In order to be given a salvage title, a vehicle must be extremely damaged or considered a total loss. Once the car has been deemed a total loss, the insurance company will seek a new title for the vehicle. Since salvage title vehicles cannot be driven on the road without major repairs, the insurance company will usually sell them to auto recyclers who will salvage the remaining parts for reuse. What You Need to Know Depending on the state you live in, salvage cars can be rebuilt and put back on the road.
This is where things get a little tricky for used car buyers.
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