If you consider yourself a handy mechanic and good with rebuilding cars, or if you have a trusted garage able to offer reliable repairs, there is a unique way some Minnesotans aim to save some money: buying a salvage title car.

However, there are some very helpful tips that one should follow. Buying a salvage title can be tricky yet can save you quite a bit of money. But, there is also the possibility of many pitfalls. Let’s break down how best to buy a salvage title car.

What Is a Salvage Title Car?

A salvage title car means that the car has been deemed totaled. It has been, most often, wrecked beyond use. These cars have been declared a loss, and are not legal for public streets.

Once a car has been named a salvage title, it is not eligible for insurance and is not legal to drive. 

In order for a car to be called “salvage” or totaled, it will have to have at least 70% of the car’s value destroyed. The car will, in simplest terms, be wrecked.

Who Sells Salvaged Cars?

While they are not legal to drive, such vehicles will often be towed by the insurance company after they have been totaled. The company may then decide to rebuild it in order to recoup some of the costs. After such a rebuild, with the proper documentation, it can be sold, though those issues must be disclosed via the rebuilt title.

How to Make a Careful Purchase

The first thing to know when looking at a salvaged title car is to review its damages. Ask the seller for a complete damage report and understand every part that may have been replaced. Even if you aim to do the work yourself or seek the help of a pro after purchase, it is important to first know everything that is wrong.

Ask specifically if the odometer has been broken, replaced, or altered. As this tool measures the miles that have been put on a car, there are very specific laws about its replacement or repair.

Protect Yourself In a Sale

Once rebuilt, a vehicle will need to obtain a rebuilt title. This title will notify any future owners about the ways in which the vehicle has been damaged. Such events as accidents, fire, flood, or major damages are typically noted.

Additionally, a car will have to include a rebuilt title that notes if it was excessively used as a taxi or law enforcement vehicle. Oftentimes, there will also be a note if the car was returned to its manufacturer or if it was still under any warranty when it was salvaged.

Difficulties Buying a Salvaged Title Car

Before you make a purchase, be fully aware of some of the challenges such a vehicle may face. When buying a car, you will likely have to pay for it in cash. Loan services are often reluctant to lend money for such questionable purchases.

You may have difficulty insuring the car, as well. Some insurance coverages either will not accept a rebuilt title or will increase the prices to insure it. Even if you can get insurance at a high rate, the company will likely low-value the car due to its history.

You may also face very low trade-in values. Though today’s used car market is booming, offering sellers an above-average profit on most makes and models, cars with rebuilt titles are a red flag for many. You may have a tough time should you ever choose to resell the car or trade it in.

Not for the Faint of Heart

While it can be done, and certainly there are safety steps to ensure you are making a careful sale, there is no perfect way to be sure a salvaged title car is a smart financial decision. There are many risks involved. Be sure, should you choose to investigate this route, that you do your homework and gather all of the facts before signing on the dotted line.