Insurance and Salvaged Cars
When a car is involved in an accident, the repairs will sometimes end up costing more than the value of the car itself, in this case, the insurance company will write it off as “totaled”. Insurance and salvaged cars generally do not go hand in hand. These types of cars are ones that make it to salvage auction lots. However, the term “totaled” can mean many things; it can even be as minor as weather damage. Even hailstorms can dent cars to the point that the repair costs exceed the car’s value. Of course, in many cases, the vehicle has endured some sort of collision, either with another vehicle or obstacle. Because this can sometimes mean that the car is not safe to drive in its current state, it does mean that anyone who wants to buy a salvaged car will want to research the vehicle’s history thoroughly before making a commitment.
Because the value of a car depends heavily on the year that the car was built, a 1990s-model Honda Civic, for example, can be totaled by a hailstorm. A 1995 Honda Civic is worth anywhere from $550 to just over $1,000, depending on the car’s condition. Minor cosmetic damage can easily exceed its value, thereby totaling it. In this case, this has nothing to do with the car’s drivability. Even if the car is well-maintained, the cosmetic damage can be devastating to its resale value. Because these extenuating circumstances exist, it is vital for customers to do as much research on the cars they consider buying, since in auto auctions, these sales are final, and the process for reselling a car with a salvage title can prove to be difficult in the future.
For those who want to buy a car with a salvage title, there is one important point to know; if the owner wishes to sell that car in the future, it must be sold under the salvage title and not simply passed off as a used car. This ensures that the car adheres to the proper safety standards—a new buyer will know that the car has endured its share of issues, and will be able to make a decision accordingly. This is true with insurance and salvaged cars as well. However, if the car is rebuilt and has been proven safe and drivable again, some states will allow a change of title so that it can be sold once again without having to deal with the salvage title. Many dealers buy cars with salvage titles from these very same auctions, and their mechanics restore the drivability of the car.
Salvaged cars are written off by insurance companies who take them in after accidents or after they have been repossessed by owners who missed multiple payments. Whatever the case, when these cars go on auction, they feature extensive details to inform the customer of what he or she is getting. From the obvious rear-end damage on a salvage car to the mechanical problems under the hood that can’t be seen at first glance, the known damage is disclosed for the consumer. Potential buyers are urged to look into the history of the car to determine if insurance for salvaged cars is available. In the end, salvaged cars can save hundreds and sometimes thousands of dollars if the appropriate research is invested before purchase.