Introduction
When looking for a used car, you may encounter deals that are too good to refuse. Some of these cars are sold with a “salvage title“, which is usually associated with cheaper prices, but before you get lured by the cheapness, it is essential to know 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 a vehicle that has been determined to be a total loss by an insurance company due to an accident, theft, fire, flood, or serious damage that has happened to it. 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 can not be used and driven legally on the road unless it has been repaired and has undergone 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.
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 cost of reusable parts in a wrecked vehicle usually will exceed the cost of the entire salvage vehicle.
Common Safety Risks Associated with Salvage Title Cars
Salvage title cars often hide serious safety risks like structural damage, faulty airbags, and brake issues. Let’s learn the common dangers that can 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 it is repaired, it may not regain its original integrity. By not being able to fully protect you in another crash, its structural integrity may jeopardize your safety. - Faulty airbags
If the airbags of a salvage car had been deployed, it would be difficult to ensure that they are replaced accurately 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 will handle salvage title vehicles differently than they do clean title vehicles. 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 they do, there is a good chance you will only be able to get liability coverage. 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 purchasers of salvage title automobiles pay cash because financing companies are less likely to approve loans for a salvage title automobile. This shrinks the pool of buyers even more. - Disclosure Requirement
Ontario law requires the seller of the vehicle to be honest and fully disclose a vehicle’s title status when selling it. 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, an individual will require a structural inspection and a safety inspection before they can drive 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 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 a counterfeit inspection, or do temporary repairs that get the car 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, there are usually too many hidden risks to justify the price decrease. 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 automobiles can be enticing because of their low prices, but they come with real and serious risks. Safety issues, hassle with insurance, unexpected repair costs, and resale issues – there are 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, safely remove the plates, and pay you on the spot. Greenway Auto Recycling is trusted across Ontario for easy, honest, and fast scrap car removal.
