What is a Salvage Title Vehicle?
...and what you need to know if you're thinking about buying one.
Capital One
ARTICLE QUICKTAKES:
A car with a salvage title can seem like a tempting proposition. To the naked eye, it might appear identical to the much more expensive vehicle right next to it. But the term “salvage” indicates something bad happened, which is why it’s important to know how a car gets that kind of title, and how to spot one in the wild.
WHAT IS A SALVAGE TITLE?
“Salvage” is a permanent note on a car’s title that indicates it was once written-off, or “totaled,” by an insurance company, usually because it was involved in a heavy crash, theft, fire, flood, or damaged by some other act of God. Most salvage vehicles have lost more than half of their value, and will always be worth less than one with a clean title.
SHOULD I BUY A VEHICLE WITH A SALVAGE TITLE?
Most lenders, including Capital One, won’t lend you money to buy a salvage title vehicle, so financing options are limited. Selling a salvage title car is more difficult, too, so you might get stuck with it. And while reconditioned cars may seem to operate well at first, problems might not become apparent until months or years down the road.
While accident damage may seem obvious, a flood, for example, can cause a range of problems from rust in structural components, to mold and mildew in the carpet, seats and headliner, to corrosion in wires and circuitry that gradually results in more and more trips to the mechanic.
Unless you’re a skilled mechanic willing to spend hours diagnosing or repairing problems and you’re willing to pay cash, salvage title vehicles can be a dicey proposition.
HOW CAN I SPOT SALVAGE TITLE CARS?
The easiest way to spot one is a suspiciously low price. If you compare 10 similar cars and the first nine are in the $15,000 range, but the 10th is $10,000, look a little deeper.
A dealer is required to inform you if there’s a salvage title, and if it’s a private seller, sites like
Beyond price and paperwork, look for red flags when you’re physically inspecting the vehicle. The Vehicle Identification Number, or VIN, found on every body panel (hood, doors, trunk, etc…) should match the VIN on the dashboard. Look for signs of a previous collision, which can be as subtle as a little paint missing from a bolt. And spend extra time looking in hard-to-reach areas: if the car was in a flood, there will likely be dirt left behind as the water gradually receded.
Finally, ask if you can have the vehicle checked out by your own mechanic. If the answer is no, that’s a serious red flag.
IS BUYING A SALVAGE TITLE EVER A GOOD DEAL?
Ultimately, if you’re prepared to accept all of the inherent risks outlined above, then it is possible to find a good deal in a salvage title vehicle. But buying one certainly requires a leap of faith, because when it comes to reconditioned cars, the risks can outweigh the rewards.
