How to Save Money Buying a Car Through a Salvage Title Purchase

Buying a salvage title car can save money.

New cars are expensive, and used cars are usually a good way to save some money. If the car you have your heart set on is still too expensive as a used model, consider buying a car with salvage or rebuilt title. These cars, if purchased with the proper precautions, can save you a substantial amount of money.

Difficulty:

Moderate

Instructions

1. Understand what "salvage title" means. A car with a salvage title has been involved in an accident and has been determined a "total loss" by an insurance company. Cars with a salvage title are not allowed to be driven on the road until they are repaired and retitled.

2. Locate and visit salvage dealers and attend insurance auctions. You may need to attend auctions with someone who owns a used car lot and has a "buying agent" designation in order to buy a car. This person may also offer a lot of helpful information on assessing damage and making a wise purchase. Once you identify a car, get the CARFAX history for it to find out details on when and how it got a salvage title.

3. Make all the arrangements that are required when buying a car with a salvage title. You will most likely need to pay cash for the car, and since it is illegal to drive, you must have arrangements made to tow the car or otherwise transport it to another location. The car will require repairs and an inspection, and then a new title must be obtained.

4. Repair the salvage title car. If you want someone else to do the work, ask the salvage dealer to recommend a body shop, perhaps the body shop they use. Once the work has been performed, the body shop can also do the inspection of the car that is required to make sure that it is in safe and proper running condition. Once the car passes inspection, it is ready to receive a "rebuilt" title from the Department of Motor Vehicles.

5. Check around with different insurance companies for car insurance quotes on a rebuilt title car. Many insurance companies will not provide coverage for a car that has a salvage title or rebuilt title, so this important step should be performed early on in the process.

Tips & Warnings

• If you choose not to repair your own car, you can still benefit from buying a car that has had a salvage title. These cars are still lower in cost than a new or used model, although someone else has done the repair work for you. Body shops may have some rebuilt title cars for sale that they have worked on. Otherwise, do some searching online for cars with a rebuilt title.

• Before making a final purchase, if you choose to go with a car someone else has rebuilt, have an independent mechanic of your choosing review the car and make sure it is safe, in good working condition and worth the price asked.

References

• CarInsurance.com: What is a Rebuilt Title or a Salvage Title?
• LeaseGuide.com: Rebuildable Cars -- Salvage Cars -- Repairable Wrecked Cars
• California Department of Motor Vehicles: Registration Requirements at a Glance