• Go to page :
  • 1 2
  • Text Only
Voting History
rated:
This topic got started in the Manheim auction thread and I thought it deserved a bit more discussion. The obvious benefits of buying the right salvage title car is that you get a great car for half the price you would pay for a normal one. The obvious downside is that the entire thing could be a giant piece of crap that was improperly repaired and is barely roadworthy.

There are certain inefficiencies in salvage cars that I see that could be beneficial to FWF members:

1. Because almost no lender will finance a salvage vehicle, this removes a large portion of the car buyer market as buying competition.
2. Older cars could be totaled with relatively minor damage, just because the age of the vehicle
3. Motorcycles seem to be totaled at with even minor damage, salvage auctions show lots of motorcycles that seem roadworthy
4. Vehicles that are recovered from theft could have no damage to anything but the ignition which could be a bargain.

Many obvious downsides:

1. It may take an expert to really know what type of damage needs to be fixed and an insurance company (in theory) has an informational advantage in this respect.
2. The car will be worth far less if you ever wanted to sell, so you basically have to drive it into the ground.
3. I've read (though have no personal experience) that some insurers won't insure salvage title cars.

My only experience with a salvage title car was actually a winner. I bought a car that had been hail damaged and thus had a branded title from a guy who runs his own paintless dent repair business who had gotten out most of the dents. The car was used and a few years old anyway, so it didn't look any worse than the similar models that I was looking at. KBB was $7500, I bought the car for $5,000 and there have been no problems with it.

So, for savvy FWF members, do we have another potential way to get great values on cars by thinking outside the box? Or is this a horrible idea that I can blame on the scotch I've been drinking?

Member Summary
Most Recent Posts
All depends on how high the water got. I bought a brand new 2013 Chevy with 9 miles on the odometer a few weeks ago and ... (more)

atikovi (Jan. 27, 2013 @ 6:13a) |

Back in the 1990s, there was a dealer in Kalamazoo who only did Escorts. He'd have 20-30 of them on the lot at any given... (more)

taxmantoo (Jan. 28, 2013 @ 7:57a) |

if you're a member of the general public and don't have a dealer's license and want to buy a car at either the iaa aucti... (more)

wagner03 (Feb. 08, 2013 @ 8:38p) |

Thanks for visiting FatWallet.com. Join for free to remove this ad.

mwa423 said:   I bought a car that had been hail damaged ... another potential way to get great values on cars by thinking outside the box? Or is this a horrible idea that I can blame on the scotch I've been drinking?

Hail-damaged total losses can be outstanding values for those who don't care how the car looks.

Other causes of loss are more problematic. As the number of air bags increases, more older cars will get totaled if only because of the cost of replacements.

BEEFjerKAY said:   mwa423 said:   I bought a car that had been hail damaged ... another potential way to get great values on cars by thinking outside the box? Or is this a horrible idea that I can blame on the scotch I've been drinking?

Hail-damaged total losses can be outstanding values for those who don't care how the car looks.

Other causes of loss are more problematic. As the number of air bags increases, more older cars will get totaled if only because of the cost of replacements.


In your experience in the insurance industry, what are other situations where the insurance company will just total cars with very little inspection? Obviously, knowing these situations will give a better idea of where the diamonds in the rough lie.

mwa423 said:   what are other situations where the insurance company will just total cars with very little inspection? Obviously, knowing these situations will give a better idea of where the diamonds in the rough lie.

I don't think your first statement necessarily leads to the other.

For instance, a "flood car" doesn't need much inspection. But it will never ever be a reliable daily driver.

An older totaled car might get a closer inspection and still be worthwhile, especially if one is looking to part it out on fleabay.

Perhaps a car that was involved in a shoot out might be a good value. But recovered stolen cars have their own issues.

I would be very hesitant to buy a car that's been in an accident or under water. A car that is damaged by hail, on the other hand, is worth a second look if the price is drop dead gorgeous.

What about the process of getting these vehicles back on the road?

Is it more than just taking the salvage title down to the DMV? Isn't there a state required certification process?

Would be awesome if an engineer could comment on the strength and flexibility of steel used in car construction after an accident.

I bought a used VW Beetle salvage and had it checked out by a mechanic. got it for 5k cash. Had it for 2 years but then had some electrical issues. Fixed it up for like 500$ and sold it on eBay for 6600. There's good value as long as it works out and you get it checked out.

CptSavAHo said:   Would be awesome if an engineer could comment on the strength and flexibility of steel used in car construction after an accident.

That might have been a significant factor 20 years ago. Today with unibody construction the norm -- and aluminum so pervasive -- I'd be more interested in hearing an engineer's perspective on the degree to which internal crumple zone deformations can truly be repaired.

When I was young a friend of mine used to buy salvage cars (in Germany at the time) and repair them. This way he afforded a salvaged Porsche for himself. But he was a car repair guy and had all the tools, bought used cars, repaired them and repainted them fully. I used to help him once in a while and he spent almost all of his weekends on it.
In my opinion you really need to know what you are doing when buying one and I would not buy a repaired salvaged car without knowing who did it. How do you even know they put a working air bag back into the car ? If you can do the repairs yourself there are bargains out there but without experience I would not want to touch it. Frame damage is hard to recognize if you don't know what to look for.

Here is a link to the airbag scams in California a while ago.

http://news.consumerreports.org/cars/2011/10/california-passes-n...

Edited : added link to consumerreports

in NY State you can't title salvage in your name until you go through Salvage re-examination, which takes more than a month. After that you get a title that says "rebuilt salvage". If you got it from a dealer you may be able to get temporary plates, but if not, you can't drive it until you pass the inspection.

I think there are some misunderstood terms here. If a car is salvage it generally doesn't have a title that can be registered.

In PA. they have a salvage certificate. After the insurance company takes possession of the vehicle the title is processed and a salvage certificate is issued. The vehicle can then be sold for salvage.

Once the vehicle is repaired, it has to go to a state approved inspection station. They determines the vehicle to be "repaired" according to the reconstruction guidelines and deemed to be road safe for state inspection (the same as any other vehicle). They fill out some paperwork, you fill out some paperwork, you take the paperwork to a notary, along with proof of insurance, and they send it to the state. The state issues an "R Title" along with a current registration and sticker for the plate. Here the process costs ~$75 plus the inspection and emission fees. Then the cost of the notary to process the paperwork and the cost to the state for a new title and registration.

If you have a wreck and want to keep your wreck as a totaled vehicle. The insurance company will get three salvage quotes for the vehicle which will determine how much they will let you buy the wreck for. You will have to get a salvage certificate in your name before the insurance company will issue payment for the damages. They will pay you the amount of the claim less the value of the salvaged vehicle.

Airbag costs and replacement labor can be a big part of the repair bill. Keep in mind that if the estimate to repair the vehicle exceeded the value at the time of the accident, most of that repair will have to be done to pass the inspection process for a title. There was a place around me that was not replacing the airbags. But since they were also an approved inspection station for reconstruction they passed the vehicles without being fully repaired. They are no longer allowed to sell reconstructed vehicles and are not an inspection station either.

When a vehicle is sold for scrap the state can issue a scrap certificate. Vehicles with a scrap certificate cannot even be parted out, they must be destroyed at a scrap dealer.

Had been burned once by a car with a salvage title. In my opinion, if I'm getting a car with such a title, I plan on driving it into the ground and then part it out.

BEEFjerKAY said:   mwa423 said:   what are other situations where the insurance company will just total cars with very little inspection? Obviously, knowing these situations will give a better idea of where the diamonds in the rough lie.

I don't think your first statement necessarily leads to the other.

For instance, a "flood car" doesn't need much inspection. But it will never ever be a reliable daily driver.

An older totaled car might get a closer inspection and still be worthwhile, especially if one is looking to part it out on fleabay.

Perhaps a car that was involved in a shoot out might be a good value. But recovered stolen cars have their own issues.


Insurance adjusters are very lazy on flood cars which can make them great buys. My last car was a flood car, had to replace the box that control the electronic locks and wash the floor mats and after that it was good to go. Maybe 3 hours of work. Car cost 4k at the auction. I drove it for 5 years and after it was totaled (again) the insurance company paid out 4.5k. I never had to put any money into it besides breaks and exhausts.

To make money off salvage title cars you are going to need to be a dealership. CoPart the largest auction house for salvage cars doesn't let the general public in.

Not necessarily
Autobidmaster is run by copart and the public can bid

In FL (and other states), once a car has been repaired and inspected, it is issued a Rebuilt title. Note that manufacturer's warrantees become null and void at this time regardless of mileage. I got a very good deal on a 2 year old f150 rebuild. Two years later I can still easily sell it for the same price or slightly more. Only issue I don't like with it is that collision and comprehensive is not readily available. Don't care about collision but wish I could get comprehensive.

This happened to me once about 10 years ago when I was in college.

Was at a dead stop and got rear ended and pushed into the car in front of me. Front and back bumper of the car were destroyed and I ended up in the hospital and about 3 months of PT. Insurance company totaled the car and send me a check for $2000 (Car was a piece of crap)- $200 for me to keep the salvage. Went to the junk yard and bought a new front and back bumper for $200 and put it on myself. I remember having to fill out a lot of paperwork for the DMV and having to drive it to get inspected by a special inspector who worked for them. (Not the typical state inspection.) She walked around the car once and signed off on the title. Then I sold the car for about $1500.

GermanExpat said:    How do you even know they put a working air bag back into the car ?

Duhh! This one is simple, even I can answer it. Just drive it at 80 mph into a wall and find out!

newbietx said:   GermanExpat said:    How do you even know they put a working air bag back into the car ?

Duhh! This one is simple, even I can answer it. Just drive it at 80 mph into a wall and find out!

At least your family can then sue the seller after they put you to rest .

Here's one problem (for buyers like me)... I will never buy a car with a salvaged title, regardless of what the reason was. I have considered cars that received a salvaged title due to a non-accidental reason (theft recovery, etc), but always ended up with a car with a regular title.

done this twice, once, in a minor accident MY car was 'totaled' bought it, a guy pulled Right in front of me, needed, hood, radiator, bumper, paint.. kept it for years till son totalled it... also, I Bought 2002 honda, with salvage title, from a guy with a Body Shop.. Forget my cost, but, I saved aLot, sure, I took a chance.. I won, and, I figger to keep it till I drive in into the ground, NO problems.. but, Don't buy one, thinking you will sell it, IMO, you will have to explain salvage, etc, or hide it... not good idea..

fotomaniak said:   in NY State you can't title salvage in your name until you go through Salvage re-examination, which takes more than a month. After that you get a title that says "rebuilt salvage". If you got it from a dealer you may be able to get temporary plates, but if not, you can't drive it until you pass the inspection.

Is that if you buy salvage and also if an owner retains their own totaled vehicle as salvage or just the former?

BEEFjerKAY said:   For instance, a "flood car" doesn't need much inspection. But it will never ever be a reliable daily driver.

In general this statement is right, but I comment only because Hurricane Sandy has produced TONS of flood vehicles that are for sale at IAAI and other auctions.

There have been broad/sweeping insurance claims where the entire lot of a dealership would get a check cut because some of them were in water. The sheer volume of claims from Sandy have caused many non-flood cars to be branded flood when they didn't see any more water than they would have driving in a heavy rain.

That said, there are some STEALS to be had if you know what you're looking for.

I can get a $70k car for $30k, but I'll be hard pressed to "flip" it unless I drive it around for 1+ years to prove it's roadworthy. ALSO, as somebody else said, rebuilt vehicles are often not loanable. Add to that, if you're going to spend $30k on a car, you don't want a salvage title.

If you get a high-end rebuilt car, be prepared to be stuck with it for a while.

Bought a salvage title car a few years ago for a car for my Daughter to drive to High school. She was taking College Dual Enrollment classes and had to be at school at 7:00AM.

We bought a 1999 Chevy Cavalier for $2000 she drove it for two years and was in three minor fender benders with it. One she hit a bridge, two she hit a storm sewer metal fitment and burst both tires and the third she was rear ended. Other guys insurance fixed the third one, #1 and #2 we did ourselves cheap. Sold the car for $1500 and bought her a better one for college. Very good experience. Insurance company(Shelter) said they would only write liability coverage on a salvage title car.

So, many of us have had positive experiences, how do we repeat them? The car iI bought iI found on craigslist, and likely isn't repeatable for anybody here. Any thoughts on different auctions? I am starting to think the real way to make millions would be to own a buy here pay here dealership that sold rebuilt salvage title cars.

As a side note, different states will have different requirements but i wonder how hard it is to transfer a rebuilt salvage title from state to state...

My husband is a salvage car buyer for one of the largest wrecking yards west of the Mississippi. It's a science in and of itself. They purchase region-wide from Copart, IAA, direct from some insurance companies, and from private parties. He's to the point where 98% of the time he can value a wrecked vehicle in about 30 seconds. The other 2% of the time, he gets screwed because he missed something or miscalculated. I've seen him buy a porsche that was literally a tiny ball of metal, but turned 15K in profit. It's really quite fascinating to see him look over a car and listen to his thought process. I sometimes nearly faint when I hear what he paid for a car, then see the pictures. Other times, he won't touch it with a 10-foot pole. He can sniff out bondo, flood damage, and all manner of damage with some sort of 6th sense like you wouldn't believe, even when it's totally hidden to the average person. He knows which parts on the vehicle are worthless, and which are priceless for resale. I will say that he avoids most flood vehicles like the plague, unless there's some sort of natural disaster and the market is saturated with dirt cheap flood cars. He did buy and transport several semi-loads of Hurricane Sandy flood cars, but the prices were rock bottom.

If you're buying a wrecked (or even clear title) vehicle from an auto auction, be aware that lots of funny business goes on. Apparently, it's very common to have people who make simple cosmetic repairs to wrecked vehicles, put them in the auction, and never say a word. If it looks too good to be true, it probably is. It's easy to end up with something you think is great, when in reality it's a total mess. On the other hand, there are plenty of killer deals to be had. My husband has always purchased vehicles with a salvage title, repaired them himself, driven them for a couple years, sold them at a tidy profit, rinse and repeat into something better. Many people say vehicles with salvage titles, once repaired, are worth about 50% of blue book. Around here, however, the resale price seems totally dependent on the quality of work. Good quality repair work, along with an in-demand vehicle can bring 60-70% of blue book. There are more dishonest and inexperienced people selling repaired salvage vehicles. The ones who are known to do a great job get top dollar for their work. And people get screwed all the time, purchasing barely repaired and unsafe vehicles.

What do you mean most lenders won't finance a salvaged title vehicle? I've never NOT been able to finance one, once it's passed inspection and licensed properly. I've financed 3 over the years, at 3 different banks, and all had the same rules: I could only finance 50% of blue book, but other than that, everything else was exactly the same as a normal vehicle. I also recently asked Penfed, and they finance autos with salvaged titles (same 50% rule). I ended up BT'ing instead. Obviously, you have to pay cash/credit for the wrecked vehicle, plus repair costs, but once it's passed inspection, you should be home free for a loan.

So, if you're looking to buy a repaired, salvage title vehicle, call up your local wrecking yard. Talk to a car buyer, and see which shops to avoid, and which do quality work. I guarantee they'll know what they're talking about if it's a decent sized wrecking yard. They can also likely direct you to the best shops for straightening a frame, etc, if you're doing the work yourself.

My dad has been in the salvage vehicle business since the mid 80s; at a high time he had a business partner and probably upwards of 50 cars, now that hes back to himself, it has become more of a small hobby...

I always worked in the 'family business' but have moved away and am a Physician. We have 5 cars, all salvage/totals.



A few statements I can make, and I feel like I know what I am talking about...

Titling: Unfortunately, there are at least 50 ways to do this as titles are a 'state thing'. MOST states offer some sort of ownership document (typically a Salvage Certficate) which is essentially a document that shows the vehicle and ownership. That is typically offered AFTER a 'total loss claim' has been paid on the vehicle. When the vehicle is bought, this is where things are VERY state specific. In the state of Texas, for example, as long as you can get a 'saftey inspection' (again, thats state specific.. in TX it means the lights all work and not broken and the horn honks); if it passes that, you can then get a 'Rebuilt Salvage Title'. Other states have a much more stringent 'salvage inspection' which might involve proof of origin of parts (to prevent thefts). MOST states have some sort of inspection process and then offer some sort of ownership document that says 'Reconditioned/Total Loss/Damaged History/Salvage History/etc'. Some states will issue a NON Salvage Title for a Vehicle that passes inspection (I KNOW that MS does this; this is few and far between).

As you can see, the problems with titles is that there are literally 50 different ways to do as every state is different and its incredibly variable.

Insuring a Salvage Title Vehicle: I hear people 'say' all the time, "You cannot buy insurance on a salvage title car". I can only speak to our experience, but we have never seen that be an issue. We have also been privy to cars we sold, got wrecked a second time, then was paid out again on without issue. I guess there is no way to truly confirm it, but I have yet to see this be an issue.

Bank Loans on Salvage Titles: Banks WILL LOAN on these cars, its just like anything financial, more risk means you better have stellar credit, higher down payments, likely higher interest rates, etc.

What makes it salvage? This is the BIGGEST ignorance I see on these threads and others. There is NO RHYME OR REASON to what truely totals something. I've seen people say "Only if there is frame damage, or ONLY if there is airbags deployed, etc etc". This is untrue. The definition is that a total loss "Costs more to repair than its worth", but I assure you I can show you example after example where this is NOT true.... I have seen flood cars, motorhomes, etc that were 'totaled' after the tires got wet. I have seen cars get totaled for trivial damage... literally no more than a dent. People ask how? I think it depends on many factors; often it can be fault. If I buy a new 50K dollar truck, and a high school kid runs a light and dents my front bumper and fender. It would not total; but I bought a new truck, it has 4K miles on it, and I do not want it painted. With enough pressure on the insurance company, it will be totaled. I have seen this time and time again...


Anyways, my overall opinons of the business.

Can you make a living? Yes; you WILL NOT get rich doing this I promise you. And unless you do 'much' of the work yourself, forget it. Its hard manual labor most of the time with much coordination of everything.

Should you buy a salvage car from someone? First of all, ASK FOR THE PICTURES OF IT WRECKED. There is no excuse for a dealer not to have these now days. Use your initial opinon on 'how bad does it look'. Then I would have it checked out, put on a lift but an indepdent mechanic. Drive it, make sure all the cluster lights are out (check engine, airbag, etc) and make sure it drives ok. Take a good look at the wrecked parts and their fitment. If that looks good, chances are things are ok.


I am a physician, I could buy a new Porsche if I wanted. My wife and I only drive wrecked cars and I would never consider doing anything else. I think 'anything can be repaired', and I DO BELIEVE there are haphazard repair jobs out there, but I think that a salvage car is the BEST way to save money. I have a Yukon, Z4, F350, and F150 all for probably just the Yukon costs my colleagues. I also have a boat that was damaged; and I have had a motorhome that was salvage.

Dont be afraid, just be cautious!

I actually defended a salvage vehicle fraud case at my old firm... and surprisingly my client was not crucified by the jury... although be probably should have been.

Interior had paint dumped all over it... immediately salvaged by the insurer.

troutmd said:   



What makes it salvage? This is the BIGGEST ignorance I see on these threads and others. There is NO RHYME OR REASON to what truely totals something. I've seen people say "Only if there is frame damage, or ONLY if there is airbags deployed, etc etc". This is untrue. The definition is that a total loss "Costs more to repair than its worth", but I assure you I can show you example after example where this is NOT true.... I have seen flood cars, motorhomes, etc that were 'totaled' after the tires got wet. I have seen cars get totaled for trivial damage... literally no more than a dent. People ask how? I think it depends on many factors; often it can be fault. If I buy a new 50K dollar truck, and a high school kid runs a light and dents my front bumper and fender. It would not total; but I bought a new truck, it has 4K miles on it, and I do not want it painted. With enough pressure on the insurance company, it will be totaled. I have seen this time and time again...




So true! We own a motorhome with a salvaged title. Literally, absolutely nothing happened to it. My husband got a call (at work) that a newly divorced guy wanted it gone from his driveway, TODAY. Husband's work got it for free, only had to drive it into the wrecking yard. But since it was purchased by a wrecking yard, the title automatically turns into a salvage title. Happens all the time. Perfect, never wrecked, used car is sold to the wrecking yard, but since the wrecking yard bought it, the title will be a salvage title to the final buyer. I believe that's part of state law here: If a wrecking yard got it's hands in the pot, the title comes out on the other side as salvage, no exceptions.

Other times, a car has been totally destroyed, but the owner didn't have insurance, had it fixed out of pocket, and it ends up with a clean title. Those are the cars you gotta watch out for at auctions.

No rhyme or reason!

My cousin has done huge business over the last five years by (i) purchasing salvaged/heavily damaged cars on the cheap, (ii) shipping them abroad to be repaired at very low cost (parts plus pennies for labor in certain places), and (iii) re-selling the repaired cars abroad, where issues like availability of insurance and lender financing are far less of a concern. Sounds straightforward, I suppose, although obtaining the right knowledge and relationships to put this whole package together is difficult indeed. But it has apparently been highly lucrative.

What country does he export to?
I've found several niches exporting non salvaged cars to Australia , brazil , Russia , Spain , Germany and the Netherlands

He exports primarily to the Middle East, and to West Africa. It helps that my family is Lebanese. Our people have been in the import-export business for millennia.

The cars are generally purchased in the eastern US. He tells me that the post-Katrina and post-Sandy cars were a particular gold mine.

SUCKISSTAPLES said:   What country does he export to?
I've found several niches exporting non salvaged cars to Australia , brazil , Russia , Spain , Germany and the Netherlands


My neon I recently sold
Disclaimer

I replaced the tail lights and added the SRT spoiler
Disclaimer

Cold air intake added
Disclaimer
I mentioned salvaged/rebuilt title cars on here a few years ago and got a lot of red for it. I am glad to see that more people are open to it. I have never had a problem getting insurance, and it cost the same as a similar clean title car. I have also been able to finance them. I used Mountain America Credit Union (50% blue book) and America First Credit Union. America First does low book value for the loan amount, which is was always higher than 50% for me.

I have had 4 rebuilt title cars and still have one. I have always done better financially with rebuilt titles than clean titles. One example was a 2 year old Neon that only had 6500 miles. It was already repaired. I paid $6500, and sold it about 5 years later with 70,000 miles on it for $3800. I had call after call for the car.

My first rebuilt title was a white Neon I bought for $1900. I drove it for 1.5 years when someone hit me and totalled it agin. The insurance valued it at $2500! I mademoney on it.

The current car is a Dodge Durango. I bought it for $5000. It was 4X4, leather, trizone A/C, towing, etc. already repaired. I have had it for 3 years and it now had 77000 miles and running strong.

so where do people buy the cars from the insurance companies? I have tried to google it but so much disinformation makes it hard for the newbie to try to find a place to buy a good deal direct from the ins. co.

Copart
Autobidmaster

SUCKISSTAPLES said:   Copart
Autobidmaster


some of these cars are still brand new from flooded dealer lots. would the manufacturer's warranty transfer in the state of CA?

No

Bought a rebuilt 2003 HCH for $3,100, in 2011, which is about 3x cheaper than what they were going for at the time. Front drivers side corner had been rebuilt. Mostly cosmetic issues, like crappy paint on hood and fenders, brought the price down. Took it on a 1000+ mile road trip a month after buying. Down to Portland, over mountains (to Oregon coast), then over more mountains (Central Oregon), then 240miles back north. Car kicked ass.

Went into it expecting the battery pack to be junk, but it's not too bad. I can get 48mpg commuting to work and back (55miles each way), and this is going up and down steep hills, many times. I figure I'll end up selling it for as much or a little more than what I bought it for.

Should probably add that getting insurance was zero issue.

where is the best way to buy a salvage car other than craigslist?

Skipping 20 Messages...
if you're a member of the general public and don't have a dealer's license and want to buy a car at either the iaa auction or thru copart or autobidmaster, how do you do it?



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014

It's time for an upgrade!

After a decade on our current platform, we're upgrading our plumbing. The site will be down for a few hours starting at 10PM CST tonight.

At FatWallet we strive to bring you the best coupons, deals and Cash Back. So please come back and check us out.