Introduction
When shopping for a used car, you might come across deals that seem too good to be true. Some of these cars come with a “salvage title” — often linked to lower prices. But before you get tempted by the discount, it’s essential to understand the consequences of owning a salvage title vehicle. In Ontario, owning a salvage title vehicle can lead to serious issues, from safety concerns to insurance challenges and even resale difficulties.
This blog will explain what a salvage title means, why it is problematic, and what you should be considering before making that leap. If you are planning on purchasing one of these vehicles, the information in this guide can help you make an informed decision and avoid costly mistakes.
What is a Salvage Title Car?
A salvage title car is one declared a total loss by an insurance company due to severe damage from an accident, theft, fire, or flood. In Ontario, there are criteria established that define a salvage vehicle. Once a car has been issued a salvage title status, it means the cost to repair the car is greater than the worth of the vehicle.
This vehicle cannot be legally driven on the road unless it’s fully repaired and passes strict inspections. After repairs, if the car passes a safety and structural inspection, it may be issued a rebuilt title, but its salvage history will always remain on the vehicle’s permanent record. Once a car has been issued a salvage title status, it means the repair cost exceeds its market value
Why Do Individuals Purchase Vehicles with Salvage Titles?
The primary rationale for individuals purchasing salvage title cars is the cost. Salvage cars tend to be significantly less expensive than similar year/make models with clean titles. Some purchasers believe that they can repair the vehicle for less and utilize it for personal needs or sell it for a profit. At times, individuals will also purchase salvage vehicles for parts. The value of reusable parts in a wrecked vehicle often exceeds the total cost of the salvage car itself.
Common Safety Risks Associated with Salvage Title Cars
Salvage title cars often hide serious safety risks like structural damage, faulty airbags, and brake issues. Here are some common dangers that could put you and others at risk on the road.
- Hidden Damage
One of the biggest hazards with salvage cars is hidden damage. While a car may look fine on the outside after repairs have been made, it is possible that there are serious problems lurking underneath. This not only places your safety in jeopardy but also the safety of all your passengers. - Structural Integrity
In severe accidents, a vehicle’s frame or body structure is often bent or damaged. Even after repairs, the car may never regain its original structural integrity. By not being able to fully protect you in another crash, its structural integrity may jeopardize your safety. - Faulty airbags
If the airbags in a salvage car were deployed, it’s difficult to ensure they were properly replaced by a certified auto body shop. In some instances, the airbags are not replaced properly or sometimes are replaced with substandard or counterfeit parts. You may never know this until the airbags deploy when needed. - Electrical Concerns
Water-damaged cars can develop significant electrical issues. The car may work well at first and then later have shorts in the wiring, bad sensors, and/or an engine control unit (ECU) failure. - Brake and Steering Issues
Improper repairs or repairs made in unsafe conditions can also affect critical systems like brakes and steering. Any failure in these areas can potentially cause grave situations when operating a vehicle.
Also Read: How Much Does a Safety Inspection Cost in Ontario?
Insurance Challenges You May Face
Insurance companies treat salvage title vehicles differently from clean title cars. In Ontario, it can often be difficult to find coverage for these vehicles, and if you do, it likely comes with conditions.
- Coverage Options Are Limited
Many insurers avoid covering salvage vehicles altogether. Even if coverage is available, it’s often limited to liability only. This will cover the damages you cause to others, but not any repairs to your vehicle or theft.
- Higher Premiums
Even if you find full coverage on a salvage title vehicle, expect to pay a significantly higher premium. Insurers know salvage title vehicles have a higher risk, so they will charge a higher premium for their own protection.
- Reduced Value for Claims
If you do have an accident and make a claim, the value they will assign to your vehicle will also be significantly diminished due to its salvage history. Any claim payout will also be much lower due to the vehicle’s salvage history.
Trouble with Reselling a Salvage Title Car
If you are selling your salvage title car in the future, get ready for some difficulty. In Ontario, most buyers avoid salvage title automobiles due to concerns about safety and insurability.
- Lower Resale Value
Even if the vehicle has been well-repaired and passed safety, a salvage title typically reduces the market value of a vehicle because buyers offer a more significant discount for taking the extra risk.
- Fewer Buyer Pool
Most buyers of salvage title vehicles pay cash since lenders rarely approve financing for these cars. This shrinks the pool of buyers even more. - Disclosure Requirement
Ontario law requires sellers to fully disclose a vehicle’s title status when selling. Not mentioning the salvage status of your car is illegal and exposes you to potential legal sanctions.
Also Read: Beginner’s Guide to Understanding Junk Car Titles
Potential Hidden Costs You May Overlook
Although the sticker price of a salvage title car may be low, hidden costs accumulate unknowingly after the sale.
- Inspection and Certification Fees
In Ontario, you’ll need both a structural and a safety inspection before legally driving a salvage car again. Inspections are not free, and the costs could be high if the repairs are not carried out to standard.
- Repair Costs
Be prepared for unexpected repairs. Even if the car appears to be in good condition, unforeseen issues can still arise. Repairing these issues could be much higher than you anticipated, especially when it comes to safety systems and electronics.
- Replacement Parts
Salvage vehicles from accidents or floods may involve sourcing obscure or expensive replacement or refurbishment parts. Finding the right parts to fit your car is not always an easy process and adds considerable cost.
Scams Related to Salvaged Cars to Avoid
Some sellers may misrepresent the condition of a car. They may hide damage, provide fake inspection reports, or perform temporary repairs just to make the car appear roadworthy.
- Title Washing
The title-washing scam involves moving a salvage car to another province or country to salvage a clean title. The vehicle can then return to Ontario as if it had never had salvage status before in Ontario. It’s important to check a full vehicle history report, such as those from CARFAX or OMVIC, using the VIN.
- Counterfeit Documents
Selling parties could provide you with counterfeit safety certificates or counterfeit airbag replacement documents. Always confirm the documents with the governing authorities.
Is a salvage title car worth buying?
For most people in Ontario, it probably isn’t a good idea to buy a salvage title vehicle. While the low price may be appealing, the hidden risks often outweigh the savings. Unless you have expert-level knowledge of automotive repairs or are considering buying the salvage title vehicle for parts only, it is probably best to avoid salvage title cars altogether! If you decide to buy it, consider having a professional inspect it, verify its title status, and evaluate its total history.
Conclusion
Salvage title cars might be tempting due to their low prices, but they come with serious risks and hidden costs. Safety issues, insurance hassles, costly repairs, and resale problems — there are just too many unknowns. A low price doesn’t always mean good value. Of course, everyone has to consider the risk versus reward, but consider thinking twice before risking your money.
If you have a salvage or junk car and do not wish to deal with it, please reach out to Greenway Auto Recycling. If we buy your car, we’ll handle the title transfer, remove the plates safely, and pay you on the spot. Greenway Auto Recycling is trusted across Ontario for easy, honest, and fast scrap car removal.
