During the car buying process, you may see cars listed for sale that are marked as being salvage or a branded title. What exactly does this mean and why do some people still choose to purchase them? Here is an explanation of what a salvage title is as well as some of the pros and cons to buying one. Please note that Cyprus Credit Union does not currently lend on vehicles with salvage titles.
WHAT DOES THIS MEAN?
A car that is classified as a Salvage means that the vehicle has suffered immense damage, usually as the result of an accident. In most cases, it was deemed a total loss by the insurer (meaning it would cost more to fix than it was worth). The car is then sold ‘as is’ to someone who will either fix it for themselves or to sell to someone else.
WHAT ARE THE PROS?
A salvage title car is usually less expensive when compared to a clean title of the same make, model, and year. This may be a better option for you if you’re just looking for a simple vehicle for short trips. If you do your research, you may be able to find a vehicle that has suffered minimal damage, making it a great deal. One reason that salvage cars are popular are for the parts. People who are fixing up another car may be able to buy a salvage title car for multiple parts that weren't damaged cheaper than buying them invidually new.
WHAT ARE THE CONS?
The big con, and the reason most people avoid salvage titles, is the risk involved. A salvage vehicle may not be as safe as a clean title vehicle and many insurance companies will only cover a portion of a salvage title while some won’t cover any part of it at all. It may also be difficult to obtain financing. If you ever want to resell the car, you may have trouble finding a buyer due to the title, even if it runs great and you’ve had no issues with it.