About Cars With Salvaged Titles
Often when shopping for used cars the prospective buyer sees incredibly good deals. Some of these deals seem too good to be true, and the only unusual thing in the vehicle's description are the words "salvage title." This is an important term to understand. Put simply, it means that at some time in the vehicle's past it was damaged so badly that an insurance company decided it wasn't worth fixing. However, someone else believed it was worth fixing and did so. Does this mean the car isn't worth buying? Not necessarily, but there are a few things the prospective buyer should know before purchasing a car with a salvage title.
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Insurance
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Some insurance companies do not cover vehicles with salvage titles. And some companies that cover salvage title cars will offer only liability insurance. In most states it is illegal to drive a car without some form of insurance. Consult with insurance companies before you make a vehicle purchase.
Get a Full Report
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Because you are taking a greater than normal risk in buying a car that has had significant damage, it is prudent to get a full report via one of the vehicle reporting agencies, such as CarFax or AutoCheck (see Resources). It's best to know exactly the type and extent of the past damage before committing to a purchase.
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Beware of Future Maintenance Costs
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It is entirely possible that the upkeep on a vehicle with a salvage title will cost significantly more than the same model car that has not had a history of damage. The maintenance costs could offset the savings on the initial purchase price. The best way to make this evaluation is to take the vehicle history report to a trusted professional mechanic and ask for a consultation.
Lower Resale Value
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It stands to reason that if a car is sold at a lower than normal price once, it will have to be sold at an even lower price after additional use. If you tend to drive cars for a little while and then sell them while they still have decent resale value, then a vehicle with a salvage title is not the best choice. However, if you tend to drive a vehicle until it is no longer operable, then a salvage title car might be a great bargain.
Different Laws by State
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Each state has the authority to govern use of motor vehicles. And each state may have different laws and regulations regarding vehicles with salvage titles. For instance, California has different classes of salvage title. It is best to use the above tips merely as a general guide and then check your state's regulations.
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