10/13/2019
UNDERSTANDING THE BENEFITS/DISADVANTAGES OF SALVAGE TITLE CARS.
Some, but not all, of the cars we sell at JinWan Motors have "salvage" or "rebuilt" titles. It is almost unavoidable when dealing in cars that are almost 20 years old. While there are certainly reasons to be wary of salvage title cars, in many cases such fears are unfounded. We do not deal in salvage title cars that cannot/are not fully repaired to be safe and roadworthy.
Disadvantages
1. A car can be issued a salvage title because of a major wreck that caused significant damage. If the car was not repaired properly, it could be literally unsafe to drive.
2. Cars that have been flooded will usually, but not always, have a salvage title and/or notation in their history reports. Again, unless any flood-related damage is repaired/replaced, problems could arise - sometimes many months later.
3. Having a salvage title can significantly lower the value of the car.
4. Most banks will not lend on salvage titles, and most insurance companies will not provide full coverage (liability only).
Advantages
1. Some cars are given a salvage title after only a minor wreck, with damage that can be easily repaired to be as safe as any similar car. This occurs when the car already has a low value - i.e. older cars. Since most banks don't lend on any cars more than 10 years old, all cars' value drop significantly after that age. Because the damage only has to represent 80% or more of the value for the insurance company to total it and place a salvage title on it, a car that's only worth a few thousand dollars can reach that threshold with a fairly typical minor fenderbender.
Buying such a car can be a great value.
2. Insurance companies often place salvage titles on stolen cars, typically if the car is not recovered before they pay off the owner; even if the car is recovered without damage, or has just been stripped such that simply bolting replacement parts back on restores it to original condition in every way.
They do that, in part, to prevent fraud. Some owners have been known to strip their own cars, report them stolen, get paid off, and then buy the cars back cheap at auction, bolt the parts back on, and have their original car back for next to nothing. Putting the salvage title on such cars reduces their value and the incentive to do that, albeit not completely.
Buying such a car can be a great value.
3. In general, older cars don't lose value from a salvage title like a new car does. When you're only investing a few thousand dollars, all that matters is whether it runs good and is safe. On the other hand, a late model car valued at tens of thousands of dollars can see reductions in value of 20-60% or more, depending on damage, which creates a significant risk to your investment.
JinWan Motors
Again, if one of our cars has a salvage title, it only had minor damage, which we can document with pictures and repair invoices. And, at the price point of our cars, that's all that really matters. Because our cars are too old to qualify for bank financing at this time we provide financing ourselves (to very qualified buyers and for short terms - we're not a buy here/pay here rip-off shop), we only sell safe, reliable cars at a low price point that is within reach of a typical cash buyer.
