When a vehicle receives extensive damage from a car accident or some other cause, the vehicle's certificate of title can be labeled as salvage. Each state has different loss thresholds before a vehicle can receive this label. When the cost of repairing the vehicle is 75 percent the book value of the vehicle, the vehicle will often be "totaled" and listed as salvage. Some states require the cost of repairs to be higher, still other states set the level by a lower loss threshold. Regardless of the threshold, if the cost of the repairs is determined by an expert or an insurer to be too expensive to repair it is considered a total loss.
This doesn't mean the vehicle is automatically salvaged for parts or recycled at this stage. These vehicles can be rebuilt or remanufactured. After the vehicle has been remanufactured, it is inspected and issued a rebuild title, at which time it can be legally sold as a used car.
What happens to these vehicles?
Some vehicles are a complete write-off after they have been branded as salvage. These vehicles go to the crusher to be recycled or are disassembled and used for parts. However, many other "salvage" vehicles are repairable. Insurance companies don't buy and sell cars so they hire companies to manage the total loss recovery process. There are companies, usually auto salvage auction companies, that take these written-off vehicles and find buyers who will rebuild them.
What are the advantages of buying a rebuilt vehicle?
There are many good rebuilt vehicles available for sale. Before being able to be resold, the following has to be completed (requirements may vary by state):
- Be retitled as a rebuilt instead of the original salvage title.
- The owner must present all sales receipts for any parts that have been built into the vehicle during the remanufacturing process.
- The owner must present all the serial numbers of all vehicles from where the parts were removed.
- Often, photos from before the rebuild are required for the Department of Motor Vehicles to compare them with the newly repaired car.
These steps let the consumer know exactly what they are buying - a salvaged vehicle.
The primary advantage to purchasing a rebuilt used car is that it saves you money. Oftentimes, rebuilds are performed on luxury or near-luxury models. Your local rebuilder is not going to go through the effort to rebuild a Ford Focus worth $3,000, but they will go through the effort of rebuildng a Lincoln Navigator that could be valued at $20,000 or more. This means you can get a rebuilt luxury vehicle for even less than you could if you were to buy a traditional used car.
An addition benefit is that rebuilt cars are environmentally friendly. Recycling of salvaged vehicles is a costly affair and only portions of the vehicle and be effectively recycled. With a rebuild, a large majority of the vehicle is saved from the crusher, and goes on to lead a potentially long and useful life.
What are the disadvantages of buying a rebuilt vehicle?
Some flaws are obvious to the average consumer. However, many problems can be hidden (either purposely or inadvertently). The condition of the frame and the overall soundness of the car, for example, are difficult to discern without being an expert. Many repairs can't be seen; therefore it's hard to know if these repairs have been done properly or not. Some repairs are very expensive, and if they are not repaired properly, the vehicle could be unsafe.
It is always a good idea to have the vehicle checked over by an independent expert before you purchase any remanufactured vehicle. Have a vehicle history report completed on the vehicle and ask questions. Ask if the vehicle was ever in an accident? If it was, who repaired the vehicle? Were the collision repairs completed by a respectable and licensed company?
There are a few easy things to check out when looking at the vehicle. Check to see that the body panels are smooth and aligned. If they aren't, it could indicate that the frame is bent. The same for all the doors and trunk, do they all shut properly? Also, check to see that one key opens all the locks, otherwise the doors and trunk may have come from different vehicles.