Can I insure a car with a salvage title?
Chances are, you’re looking to pick up a new ride. The bargain hunter within has found salvage title vehicles can be a nice way to get a deal on a ride you could only afford in your dreams. You may be asking yourself, “what’s the catch?” Perhaps, you’ve already learned the tough part about salvage vehicles: insurance. It can be a hassle to insure a car with a salvage title.
When it comes to insuring a vehicle that has suffered severe damage, insurance companies can be stingy. Some companies will only offer limited coverage for your “new” vehicle. Others see the salvage title and run, not wanting the liability of a car with potentially irreversible damage. It makes sense if you think about it. Insurance companies look at risk. A car that has undergone severe damage could be a bigger risk. Risks cost everybody money.
For you, the point in looking at a salvage title vehicle is to save money. This is possible, and you can even insure it! All it requires is a good deal of due diligence on your end. Salvage vehicles can be a project requiring numerous repairs, shop time, and serious TLC.
Insuring a Salvage Title Car: What You Need To Know
Damages and Estimated Repairs
In your purchase, you have to learn to assess the damages and estimated repairs. What sort of care does the vehicle need? Can you do the repairs yourself? Do you have a good mechanic who won’t cost a fortune? Is the car a total loss? Is it better of in a junkyard than your garage? These are the things you have to ask yourself when looking into salvage title vehicles.
First, look at the title. To be successful, you must learn how to read titles in your state. Some are color coded. Either way, there are three types: Clean, Salvage, and Rebuilt Salvage. It’s likely your title won’t be clean if you’re searching for tips on insuring a salvage title vehicle. If it’s salvage, you’ll have issues with insurance pricing and coverage, as well as state legality. Some states, such as New York, don’t even allow salvage titles to operate on the road without proof the vehicle is operational. If it’s a rebuilt salvage, that’s a different story.
If you’ve got one you can steal which won’t be a frivolous cause to repair, then you have options. Having the vehicle refurbished and tidied up could make you eligible for a rebuilt salvage title. Alternatively, you can skip the trip to the mechanic shop and just buy a vehicle that’s already been rebuilt.
This type of title is still going to be significantly cheaper than a clean title. You’ll save tons of money and your car will be easier to find insurance for. Now, if you find a good rebuilt vehicle, it’s definitely recommended to take it in for an inspection. You want to make sure this vehicle is as advertised.
Nobody wants to get a smoking deal only to find out later they bought a junker that looked smooth on the outside. Get your mechanic buddy to check out the work that was done and make sure everything is good for the road.
Getting Coverage for Damage
Now, when it comes to insurance, you may have trouble getting coverage for damage with a salvage title. Some companies just do not want to cover salvage title vehicles for future damages. A rebuilt salvage title comes with a different set of insurance rules. You should be able to get comp and collision coverages, just check your rates. Most insurance companies will cover somewhere around 80% of the value of a car in damages. This means your insurance checks won’t be that great if you end up in a claim situation because your vehicle is cheap.
This isn’t a big deal unless your premiums are expensive, which would negate the whole point of trying to save money by buying salvage! To top it off, some companies actually have a surcharge for salvage title vehicles! Make sure you look into this when getting a quote.
Insuring Salvaged Vehicles: Will I be able to purchase full coverage on this vehicle?
If you’ve found a good vehicle, and think you have a company willing to insure a car with a salvage title for a decent price (with decent coverage), then you’re almost there. Your insurance carrier will likely want some information and inspection done on your vehicle before binding your policy. First things first have that certified mechanic’s statement for your vehicle ready, so they know you’re not trying to insure a clunker. They might also ask for photos of the vehicle for reference. This is how the would prevent you from filing a claim for something that was already broken when you bought the car.
There is a lot to consider when it comes to buying a salvage title vehicle. You can definitely save some money buying salvaged cars, but you have to assess the risk. The most important thing is surveying your vehicle of choice to make sure you’ll be able to insure it properly, without paying the money you saved on the vehicle towards future insurance premiums. For those of us willing to do the work and research, this is definitely a great way to save money on a car.