How to buy the perfect salvage car with 5 simple tips
When my 18-year-old son, Gabriel, was ready to buy his first car, his plan was to buy a high-mileage clunker for a few thousand bucks. But for a few thousand dollars more and a little help from dad, we decided to buy a late-model, low-mileage Japanese car with a salvage title. While salvage title cars do come with some risks, you can find quality cars, but you need to be careful. My son and I agree, our caution paid off.
On average, salvage cars lose 50 percent of their original value after repairs. The car I purchased from J.C. Auto Sales, a 2016 Scion FR-S with 24,000 miles, retails from $20,000 to $22,000 by Kelley Blue Book standards. My total cost was $10,000.
While the savings of buying a salvage car can be amazing, here are some tips that can keep you from getting a bad deal:
1. Find an honest dealer
Many of the salvage cars sold online are from small, independent car dealers that work from their homes or work out of small body shops. These cars don’t come with warranties and can only be purchased with cash. So be cautious.
“We try to be as legit as we can because there’s a lot of bad business out there,” said Juan Castaneda, owner of J.C. Auto Sales. “Besides being friendly, I’m honest with my clients. If I make an agreement I stick to it, even if it costs me profit because I want clients to come back.”
Castaneda has been selling used cars for five years from his home in Santa Fe Springs and works with a couple of local body shops. He sells both clean- title and salvage-title cars. I bought my first salvage car from him. This Scion would be my third.
2. Get pictures of the car
The two previous salvage cars I bought from Castaneda were cars he had listed on Craigslist. This time, I asked him to search for a salvage late-model Scion FR-S with low mileage that he could repair for me. And I wanted to get pictures of the damaged car, because most clients don’t see pictures of the car until after it’s repaired.
“I have lots of clients that ask (other dealers) for pictures of the car when it was damaged and the dealer won’t give them pictures,” Castaneda said. “But I do. I show them pictures because I want to gain their trust.”
Within a couple of days, Castaneda sent me pictures of a 2016 Scion with damage to the passenger side he found on an auto auction website. He knew this would be a good car.
“I try to avoid cars with front-end damage because they are higher risk and more costly to repair because most critical components are around the engine,” he said.
He said the damage to this car was mostly cosmetic and that the bid for the car may be higher as a result. But he thought it would be worth it. He put a $6,800 bid on the car and won.
3. Run a history check
Castaneda said auto auctions he deals with includes auto reports on the cars they sell, and will even take back that car if there are discrepancies with the reports or the car doesn’t operate as listed. But it’s always a good idea to do your own history report on the vehicle identification number (VIN) just to be sure.
4. Get your car inspected
If you can’t trust the dealer who sold you your salvaged car, get a mechanic or qualified specialist to check out the vehicle. Some are able to tell you if you have a car put together with different parts.
“Be careful of washed titles. You’re not suppose to be able to move these cars from state to state without a salvage title, but some people do,” said Nancy Kincaid, press secretary for California Department of Insurance. “People who run scams would take multiple parts from salvaged title cars. There are hidden VINs all over the cars. Have the CHP inspect your car. They know where to find these VIN numbers.”
5. Make sure you can get insurance
Talk to your insurance company and make sure they’ll insure it. Usually they will insure you for liability, but may not insure you for collision. My insurance company insured my car for both liability and collision, but how much the insurance company is willing to cover my car for collision is up to the discretion of the underwriter and what they say the value of the car is worth after the accident.
“You can ask for diminished value of the car you purchased. That’s the key,” Kincaid said. “Have an expert who can give the appraisal of the vehicle and give you an adjusted value of the car.”
Kincaid said you can get the application at the DMV and present that to the insurance company to prove the car’s value.
“Make sure its eyes wide open. Know everything you need to know before you put yourself in danger,” Kincaid said.
