While it is possible to finance and insure vehicles with salvage or otherwise branded titles, it can be difficult and expensive to do so.
Vehicles with salvage titles typically have no Blue Book value, so demonstrating to your lender the worth of the vehicle is more difficult than it is on a normal car.
Is it worth buying a salvage car?
A car is considered totaled when the cost of repairs is greater than the car is worth. When these totaled cars are purchased, fixed and put back on the road, they get a salvage title. Think about that for a second. So when all is said and done, a buyer shouldn’t expect to get a perfect car for 40 percent off the price.
How much is a salvage car worth?
Multiply the car’s current market value determined earlier by 0.25 (1.00 minus 0.75) to find its salvage value. The result of this calculation will always be lower than the current market value of the car. If the cost of repairs exceeds this amount, the car is written off as a loss.
How does a car become salvage?
When a car has been in an accident, stolen or weather-damaged and repairs will cost more than the vehicle is worth, the car insurance company will total it and take possession. The car will be issued a salvage title to warn future buyers that an insurance company has declared the car a total loss.
Photo in the article by “Wikimedia Commons”