Is it Ok to Buy a Car with a Salvage Title?

Understanding Salvage Titles: What You Need to Know

In this episode of 'Women Buying Cars, Meredith  dives deep into the topic of salvage titles. She explains what a salvage title is, how cars get them, and why someone might consider buying a car with a salvage title despite potential risks. Meredith also covers the common types of damage that lead to cars being totaled, including severe accidents, flood damage, hail damage, and theft recovery, and shares tips on how to navigate the market if you're considering such a purchase. Additionally, she highlights the Kia Sorento Hybrid as a recommended vehicle. This is your episode if you have ever wondered, "What is a salvage title?" "Is it ok to buy a car with a salvage title?" "How do cars get salvage titles?" "Are salvaged cars cheap?" "What is a totaled out car?" Tune in for an in-depth look at the pros and cons of salvage titles and practical advice for car buyers. 

00:00 Introduction to Salvage Titles
00:44 Meet Your Host: Meredith Reynolds
01:17 Broadcasting from the Closet
02:11 Understanding Salvage Titles
04:04 Reasons Cars Get Totaled
07:06 Hail Damage and Theft Recovery
13:07 The Kia Sorento Hybrid Review
17:48 Why Buy a Salvage Car?
18:56 Risks and Considerations of Salvage Titles
21:58 Conclusion and Final Advice

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Transcript

Meredith 0:02

If you have been shopping for a car, I'm sure at some point someone told you to stay away from cars that have a salvage title, but what is a salvage title? How does that happen? Can it ever be un salvaged? Someone's buying these cars, why is it ever okay to buy one? We're gonna talk about all that today on women buying cars. Thank you for tuning in. I'm Meredith Reynolds, my husband Todd, and I own Reynolds Automotive in Merriam, Kansas. If you're in the Kansas City area and you're looking for a car, please come see us. A new feature here on my podcast is there should be in the show notes at the top. There should be a place to text me. If you have an idea for a show, I would love to hear it, so please use that to let me know what I should be talking about on the show or to leave a comment only. Nice comments, please. I'm too fragile for anything else. So I am coming to you today from my closet. Did you know that a closet provides great sound? This is where a lot of people do their podcasting when they podcast from home. So you maybe imagine me In some studio with a big fancy. Recording table and no, I'm actually just sitting on a pair of dirty jeans that are on the bottom of my floor of my closet. And even worse, I don't have any light in here. I have one of those pull lights where you pull the string in the light comes on in your closet and the string broke off and now I can't turn on my light and I'm too afraid to mess with it, to fix it on my own. So I've got. A really great handyman named Pepe. He comes out every few months for a list of items I have for him to fix, and that will definitely be one of them as it is hard to sit here and read my notes. In the dark. So today we're talking about salvage titles. What is a salvage title and how does that happen? Most Cars have what's called a clean title, or maybe someone would call it a clear title. We call it a clean title. Clean title just means it's either never been in a wreck or it has been in a wreck, but it wasn't deemed salvageable. It's important that you look when you're buying a car at a vehicle history report. That can be Carfax, that can be auto check, and I'm sure there are other ones. Personally, we use auto check because that's what the auctions we buy vehicles from uses. It's going to tell you if the title is clean or salvaged. It's going to tell you if it's been in any wrecks, and often it even categorizes those wrecks as mild, moderate, or severe. I have seen cars that have a record of being in a severe crash and it's still not deemed salvaged. Personally at Reynolds Automotive, we do not buy cars that have a severe wreck. And we never ever buy cars that have a salvaged title, but we do buy cars that have been in minor and moderate wrecks because if we didn't, we would never have any cars. it's less frequent that we find a used car that has never been in a wreck. So for a car title to be Considered salvaged, and sometimes you might see this called branded, uh, branded title is a broader category. A salvage title is a type of branded title. And it's used interchangeably with branded, but it's not exactly the same thing. So to have a title, an insurance company has deemed a car. A total loss or totaled it out. If a car has been totaled, it has a salvage title. I don't know about you, but when I hear the term totaled, I'm imagining a really scary, violent wreck where the car is just crushed and there's nothing left of it. That's what I think of, and that certainly is a totaled car, but there are other ways that a car can become totaled. That do not fit that description. many of the wrecks that happen, that's deemed a total loss because it's no longer safe. When a car is in a wreck, it's possible that the frame of the car can be bent and when there's frame damage, that is not a car I would want to be riding around in because it's just not safe enough. The biggest problem with salvage titles is that you are potentially driving something that is not safe. next, a wreck, a car may not even have a huge amount of visible damage, and it could still be totaled out. That especially happens if your car's not worth very much. So if an insurance company decides that the amount of money it would take to repair your car is more than what the car's worth, they're going to total it out. So if you're driving an 18-year-old car and you get into a wreck that's more than a fender bender, but not even really significantly, like you can still drive the car. The insurance company will see what your car's worth, and in that case, depending on what it is, an 18-year-old car is not gonna be worth very much. And then they'll determine how much it would cost to actually fix the car. And if those numbers are upside down, they're just gonna total the car out because it's not worth fixing. They're also going to consider things like, how long would it take to repair this damage, and how long would they be paying for you to be in a rental car? So again, when those numbers don't make sense to the insurance company, they're gonna total it out. So two cars could have essentially the same damage, but one car's 19 years old and gets totaled, and one car's 1-year-old and gets fixed because the value of that car is higher. there may be times when you're surprised that your car got totaled out because the damage doesn't seem that bad, and that is why. another reason an insurance company would total out a car is because of flood. If a car's been in a flood, the engine can be compromised. There is so much electrical involved with cars. There's so many different sensors and things that are electrical, and once water's in there, you can imagine what it's going to do to those. It could become inoperable because of flood damage and it could just become unsafe. if you think that the sensors, the blind spot monitor is working and the crash detection warning is working and it's not, then that's becomes a safety issue. So those could be totaled out for sure. Another reason a lot of people don't realize is that a car can be totaled out if it has too much hail damage. Last spring here in Kansas City, at our house we got a tiny bit of hail, but apparently that hail Cloud was sitting right on top of Reynolds Automotive because every single car on the lot had hail damage. So that's a whole lot of fun to turn that into the insurance. It was a huge claim. They paid it. Reluctantly after a significant amount of time and then they tried to drop us this spring because we actually utilize them. But that's a whole other story. We can go on and on about insurance. The point is hail does a lot of damage and it can be very expensive to fix. Fortunately, we have a really great PDR guy, which means paintless dent removal. He comes to us and can take out just about anything, and we're very grateful for him. So thanks, Greg. Even though our cars had a lot of hail damage, none of them had so much that it wasn't worth repairing. None of the cars had a value that was lower than what it would cost to take out the hail damage. If we sold significantly cheaper cars. Our cars are typically 10 to $20,000. then it's very possible they would've said, it's not worth it. And just totaled out the cars. So hail damage will cause a car to have a salvage title. One that is not very common, but can certainly happen is theft recovery. So a car is stolen, you report it stolen. A month later, it still hasn't shown up. The insurance goes ahead and pays out on that claim, and then six months later, the police find it somewhere. The car has already been deemed a total loss, and so. once the insurance company gets that car, 'cause it now belongs to them, they're going to deem it salvaged. Who knows what happened during that six months that it was on the lamb. That doesn't mean every car that's stolen will have a salvaged title. We recently had a car that was stolen for about 24 hours. If you have not seen the story, you can look it up on kctv five because they did a story about it. You can go to the Reynolds Automotive Facebook page and find the link and read all about our theft. And so in that case, that's not a salvage title. The only time I would not feel too bad about you buying a car with a salvaged title is if it's salvaged due to hail damage that is a cosmetic issue. If the hail damage is repaired, you won't even see it anymore. that really doesn't affect the safety of the car. Some states won't even, put salvage, they'll just put hail damage on the title. But a lot of states just lump it all in with all the other reasons a car would be salvaged. When really it's just cosmetic damage that is expensive to fix. People have told me anecdotally, people in the car business that cars are being totaled out much easier today than they were in the past. There are some reasons why cars are more easily totaled out these days. one is that newer cars have so many more components than older cars. Every year a new type of safety device or luxury feature comes out on a car. That means in a wreck, those things can be damaged and are very expensive to replace. So that's one reason it does not become financially viable for insurance companies to fix a car versus just totaling it out. Another thing that can happen when there's a wreck, even if it's not a major wreck, is that airbags can go off to replace and install one airbag. You're looking at somewhere around 750 to a thousand dollars. Newer cars have a lot of airbags, so imagine if you were in a wreck that caused them all to go off the insurance company is gonna pay out. To have all of those reinstalled that can be very expensive on top of the damage to the outside of the car, On newer cars, and this is true with my own car, the Chevy Bolt, they contain what are called crumple zones. My Chevy Bolt is quite small, but it has a really high safety rating because it has these. Crumple zones, meaning if I get in a wreck, God forbid, the car is going to intentionally crumple at the front and the back. It's going to smash in in order to keep the cabin safe. so the zones at the front and the back absorb the impact and give way, dispersing that impact in an effort to keep us safe inside the cabin. But if a car is crumpled or deformed, it's not going to be something that can be fixed. Easily or cheaply. It's going to look much more damaged than a vehicle that's 20 years old. And finally, car parts are expensive. The prices went up during COVI and they've pretty much stayed up. If you haven't listened to my episode on tariffs, you should. It will tell you a whole lot more about what's going to happen to those car part prices moving forward. And now it's time for my favorite segment cars I love. The car I love today is the Kia Sorento hybrid. Now the Kia Sorento hybrid comes in a plugin and a non plugin version. Today I'm talking about the kind that you do not have to plug in. And I am giving a shout out to my sister Susan, who bought her Kia Sorento hybrid from us a few months ago. It is a beautiful, true red and a really good looking car. I think in the last few years they've upped their game on the aesthetics of their vehicles. So this is a good looking car. A big Reason you'd want to buy this hybrid is because of the gas mileage. This type of hybrid is going to be using a four cylinder internal combustion engine all the time, but it's being assisted with an electric motor. This is gonna result in really great gas mileage. It's a three row SUV, which are not known for getting great gas mileage, but if you have the front wheel drive version, you can look at something like 37 combined miles per gallon. And an all-wheel drive would be 34 combined. Sorento has been making this hybrid since 2021. So if you are looking for a used car, you have a few years to choose from. This is a great vehicle if you need three rows, but you don't want an enormous SUV, like an expedition or a traverse. You want a reasonable moderate size three row, SUV. It seats six, so you have captain's, chairs all the way down the line. I love captain's chairs for the middle rows because people who need to get in the back row have such an easier time going down the aisle between the two chairs in the middle, rather than pushing a bench seat up and climbing in that way. So if you don't need seven or eight passengers, I recommend a vehicle with captain's chairs, and this is a great one. When we are comparing a Kia Sorento with a two row SUV, like a RAV4 or a Honda C rv, the second row is going to have a lot more leg room. So if you've got big kids, they're going to fit in the second row of a Sorento easier than those two row SUVs. When comparing the Kia Sorento to other vehicles that have a third row, you are gonna lose some leg space in the third row compared to those big vehicles I just mentioned, like an expedition or a traverse. However, an adult could ride in there for. A short trip if you're just taking some friends with you to dinner, an adult could get by with that, or a big kid could get by with it. You just may not wanna go on a really long trip with adults or big kids in that very back row. When you're utilizing all three rows, you're going to have 12 cubic feet of cargo area. That's enough to line up about five grocery bags when you lay the third row down. You're going to have much more cargo room than those two row SUVs like RAV4 or CRV. So while utilizing three rows, you're gonna have less cargo space. But when you put the third row down, you'll have significantly more Edmonds, which is a third party automotive expert. They say it goes zero to 60 in 7.6 seconds, which is really good for a vehicle this size. They also said the transmission shifts quicker and smoother than many hybrids and that there is not a lot of road noise. You are going to have great visibility with big windows and good sight lines. That's going to contribute to the safety rating, which are always really good for the Kia Sorento. Of course, the newer the model, the more safety features it's likely to have. And finally, this is a goodbye for. A three row SUV with the type of features that it has. To quote my sister, when I knew I needed a new car, I considered a Highlander or pilot, but the financial value of the Sorento is too good to pass up. So if you wanted three row SUV that gets great gas mileage. And can hold a lot. Without being enormous, you should consider the Kia Sorento hybrid. Now, let's get back to talking about salvage titles. so we've learned why insurance companies easily total out cars, and we've learned what events would cause that totaling, And therefore a salvage title. Why would anyone buy a car that has a salvage title? Well, the reason is money. A salvage car is going to be significantly cheaper than one that is not. Even if it's repaired and looks as good as new, even if a certified mechanic tells you, this car is safe, it's been repaired well, everything's fine, et cetera, et cetera, it's still going to be cheaper because it has the salvage brand on its title. People who buy a salvage car are going to save a lot of money, and it's a trade off for the risk that you're taking. If you have very little money and you've got to have a car to get to work. This is the type of situation that people find themselves in when their only option would be A car with a salvaged title because they're going to be able to pay very little for it. Beyond just safety. Other reasons you would want to avoid a salvage title is it's going to be harder, if not impossible to get a loan. Banks want to loan you money if they think the car is gonna last the length of the loan. It's much less likely to last if it is a salvage title. Also, if you get into another wreck, the type of repairs that would need to be done could cost more than on a car that's never been wrecked. Insurance companies may not want to insure the car, or it may be more expensive to get car insurance on a car that has a salvage title. If that car were to get into another wreck, the payout is going to be very low. Because it's already a car that's not worth very much. So if it were a 15 RAV4 versus a non salvaged 15 RAV4 and they both got into similar wrecks, the payout is going to be significantly different because your salvage RAV4 is worth so much less than the other one. Also, if you don't know the mechanic who fixed this car, you don't really know what kind of job they did. They may not have replaced the airbags, and you could be driving around assuming that you've got airbags. When you don't, they may not have fixed some of the other safety features. It's really important if you're going to buy one that you do some investigating. Something to look out for, especially if you're buying a car from an individual rather than a dealership that has a license and has a reputation to protect It is possible for someone to sell you a car that has a south title without you knowing about it. That is fraud. It's called title washing. So let's say for example, someone found out today that the insurance is gonna total out their car and they immediately put pictures of it on Facebook Marketplace. You come over, see the car, the person shows you the title that says Clean. Because it hasn't been updated yet. That is title washing and that is fraud. Really, the only way to protect yourself from that would be to take the car for a pre-purchase inspection. I have a whole episode based on pre-purchase inspection because then A mechanic is going to know which parts are not factory installed. They will be able to see if the frame has been damaged, which is a big no-no. If things are not lining up, like the windows aren't lining up, and they can also give you advice on what issues there might be down the line. Most people in the world are not going to try to trick you into buying their salvaged car, but some people will. People who buy salvage titles usually fall into one of two categories. One, a mechanic who trusts him or herself to do what needs to be done and to fix the car and make it safe. And two, someone who just really doesn't have any other options. So to summarize, I don't recommend buying a car with a salvage title. It's potentially unsafe. You won't get very much money back when you try to resell it. A lot of dealers won't even want it as a trade in. You may not be able to get it insured, and you likely will not be able to get a loan. An exception to that would be if it's only salvaged because of hail damage. cars get totaled out much easier these days because of all the safety features and extras that cars have that can get damaged and are expensive to replace. Normal car parts are much more expensive now than they were 10 years ago, so it doesn't become financially viable for an insurance company to. pay to have a car repaired. The older the car, the less the car is worth, the more likely it will be totaled out. And finally, take a look at a vehicle history report like Carfax or Auto Check. And if you're still uncertain, have it checked out by a mechanic. Thank you so much for listening. If this has been helpful to you, please give me a five star review. Please share this with another woman in your life and follow my show. It really helps other people discover me. I appreciate your time and if I can help you, please come see me at Reynolds Automotive. Thanks for listening and happy driving.