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Salvaged Cars: Is the Bad Rap Justified?

Updated on April 11, 2010

 Salvaged cars seem to receive a lot of excessive bad press. There seems to be nothing by "red flags" and "never buy one" on the Internet.

There are many situations where the car with a salvaged title is not remotely close to the connotation in the word "salvage". In fact, I suspect, most are not that bad. Here are two cases:

1. A 2001 Outback wagon Limited with 107K on it. In 01, it retailed for $20,000+. Today, if in good condition, they sell for $7000 at most. Let's say the car is in a fender bender, costs with parts and labor end up at 3-4K, bumper replaced, repainted, dents removed from tailgate, taillight replaced etc. The insurance company could salvage the car, because, the cost to fix it is 50% or more of the car's value. If it happens, the title converts from a "clean" one to "salvaged", even though, it is far from that kind of car. Suddenly, the car's worth is even less now and suffers from the stigma of a "salvaged" title! In this case, nothing could be further from the truth. It runs perfectly fine.

2. A 2006 car retailing at $23,000 when new, and during its four year life, was in two minor accidents that came to 2-3K each to fix paid by the insurance. However, the owner is then in a third accident, a major one. The rear bumper, side panels and rear door are replaced and repainted. Damage is body only-no frame or engine. The car now has 77K on it in 2010. This car might retail for $15-16000 now. However, the third accident will cost $4-5K to repair. Here, the total costs from all accidents have come to $8-10K since 06, so the insurance company could turn into a salvaged vehicle because it has paid out over 50% of the car's value. The car is sold at an auction for 3-4K, new buyer sells it for 9-10K. Again, the salvaged car is not one that was in a serious accident where its frame, engine etc. were compromised, all the damage was simply body parts and labor costs.

In both the above, the new owner would have a great car for far less money but still suffer the major problem of reselling it with a "salvaged" title.


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