Salvage titles are sometimes issued to cars, trucks and motorcycles with minor damage or easily repairable problems, so they can be a good bargain. But be aware that they're not always the great deal they might appear to be—there may be some hidden issues, and there are some drawbacks.
Salvage title vehicles might be missing important safety features such as seat belt pre-tensioners and air bags. Always have a salvage vehicle’s safety features inspected by a dealership and have the air bag system replaced. Pricing is another issue with salvage vehicles. Their price and resale value can’t be gauged by Kelley Blue Book or other appraisal guides. The average salvage vehicle is worth about 50 percent less than one without a salvage title. Finally, financing and insuring salvage title vehicles may be difficult or impossible. Many banks refuse to finance vehicles with salvage titles; others set special loan terms, such as high LTV (loan to value) ratios. Another block to financing is insurance. Banks often require full coverage to qualify for an auto loan, and most insurance companies will deny full coverage to vehicles with a salvage title.
What does a rebuilt title mean when buying a vehicle? When salvage title vehicles have been repaired, they can undergo an inspection declaring them to be legally road-worthy and qualifying them to receive a rebuilt title. The inspection fee varies from state to state, but runs around $75. Restoring a salvage title vehicle can be a good investment if it can pass inspection, which allows it to be driven, valued and sold like any other car. Purchasing a vehicle with a rebuilt title can also be an excellent bargain. However, it can still be difficult to get full coverage insurance on rebuilt vehicles, especially for physical damage. When you’re considering purchasing a rebuilt or salvage title vehicle, be sure to get the auto’s full history, a comprehensive list of damages, and receipts for all repair work.