Quote:
Originally Posted by remotemark
In the event they do want to do something like total out the car, what is the major drawback to getting a salvage title? Is it just a red flag making resale impossible?
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If theTLV (Total loss valuation) results in a "totalled out car" your options are twofold
1. You are paid the fair market value of the car (less your deductible, if you are going through your own Insurance company or simply paid in full if being paid by the adverse party's insurance company. If liability on the other side is clear, such as if you were rear ended, always not your fault, you can ask your insurance to "waive your deductible". The deductible is ALWAYS waive in the event of a "cross insured loss" where both drivers in the accident have the same insurance company, because the Insurance Company would never sue itself
2. You want to buy back the totalled out car and fix it yourself. In those situations, which sometimes happens, the policy holder receives the fair market value LESS the deductible (as stated above) and LESS the salvage value, and then gets to have the car back, to try and fix.
The salvage value is what the market value of the totalled out car's "wreckage" would be worth to junkyards who would part out the car.
The insurance might ask a couple of them for bids to find out how much that would be..
In those situations, typically, the policy holder MUST sign over the title of the car to the Insurance company, which in turn "sells" the car back to the policyholder under the conditions mentioned above, and then the owner tows or drives (if it is a "driveable total loss") away.
Salvage title cars are totalled out ones due to collision damage which are later repaired, cars that have been stolen and recovered, or stripped, or were in floods, or other situations.
In many or most cases salvage title cars are worth on the open market about 50% less than non salvage title cars.
Flood cars, and seriously damaged but repaired cars especially, are worth little on the market because basically, they are junk that was put back on the road.
Sometimes theft returns or a "light strip" can be a bargain for savvy rebuilders or people who can fix them with parts bought cheaply.
People are wary of salvage cars because a lot of fraud invlving "washed" salvage titles when cars are re registered in several successive states to go from a salvage to a clean title.
Depending on the situation, they can be a good or an awful deal, for a buyer or a seller.
But the salvage title cars are ALWAYS worth less, all other things being equal.
I hope that helps.