For a modern car daily driver that’s probably quite accurate..5 reasons to avoid salvage-title cars
"The description sounds good. The miles are low and the photos are spotless.
But then there's the asterisk: It's got a salvage title.
The seller assures you the damage was cosmetic, that no structural damage occurred. He's certainly offering a substantial break on price. What should you do?
Most salvage title cars are priced at least 5 percent below market, which seems like a good deal. But in most cases the true value is much, much less. Consumer Reports calculates that a salvage-title car is worth 50 percent of its Kelley Blue Book value, at best."
This may sound a bit severe but there is no doubt that the salvage title definitely has a detrimental effect on the value of a car. The majority of vehicles with salvage titles are cars that were totaled by the insurance Co. and were bought as salvage.
My father is a vice president of claims at a major insurance Co. He is also a CPCU (chartered property casualty underwriter). He tells me that when someone comes to his insurance company wanting to insure a car with a salvage title, they automatically knock off at least 25% of the Blue Book value. So in other words if the Blue Book value is $10,000 and you total the car, the insurance company will only pay a maximum of $7,500. It may even be less than that depending on the actual estimated value after they look at it.
Probably not relavent to classic cars as most insurance companies don’t cover classics with anything other then liability coverage.. So to have full coverage on a classic you have to go to a carrier that covers these type of vehicles.. There is usually an appraisal of the vehicle to be insured and an agreed value established upfront for the insured vehicle..