Thursday, January 17, 2008

Salvage Title?

What is a Salvage Title (or in some States they're called Rebuilt or Restored Titles)?

Well, when cars are involved in accidents the insurance company calculates the total cost of the repair job minus the salvage value and determines whether or not it would be economically feasible to do the repair. If so, the car is repaired and put back on the road with a "Clean Title". But if it not the vehicle is tagged with a brand of either Salvage/Rebuilt/ or Restored Title, then the vehicle is sold through a salvage auction.

Basically, a Salvage Title represents a vehicle that was deemed not economically repairable. Moreover, the liability of the insurance companies are dramatically decreased by branding titles.

Most people would then automatically think that buying a car with a branded title would be crazy, because your buying a vehicle that was once considered beyond repair right? Not so! With the rising cost of auto body repair, cars with minor damage are not being repaired.

For instance, I purchased a 2003 Hyundai Sonata in 2004 for $2800. This vehicle had minor front-end damage and was worth at the time about $10,000 with a Clean Title. That means the collision estimate on this vehicle must have been at least $5000; however, the accident didn't even render the car undrivable. What this proves is that the damage on Salvage Title vehicles is sometimes so minor, that you can get a deal on a car that is almost 20% off the retail price. The more expensive the car, the better deal you can get. The reason for this is that most lenders will only loan up to 60% of the retail value, which means you must have alot of cash to put down to purchase it.

By purchasing Salvage Title cars I can then sell them for the best price in town! And buyers can be confident in purchasing them from me, because I buy cars with light damage and repair them back to there original condition and sell them for less than 20% off the retail value.

Another thing to think about is this. The older the vehicle and the less it's worth, the less it matters what kind of title the vehicle has. Mostly because when your buying an older, cheaper car your buying it to drive it until it stops. For this reason it really doesn't matter where and how you get a car that goes from A to B.

Here's The Deal: Salvage Title cars are cheaper and just as safe as they were in there original state. But to help calm your concerns you can take it to a mechanic or Auto Body shop that you trust and they can give you an unbiased inspection. OTIS

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