If you’re looking to buy a car and everything seems to have checked out according to what you’re after, but the one problem is that it has a salvage title, don’t worry about if whether or not the price is right because you can calculate it yourself. When it comes to valuing a salvage title car, you need to take into account the car’s year, make, model, and mileage and above all what kind of damage it may or may not have sustained in order to earn its salvage title.
Remember that a salvage title can be obtained if the owner’s insurance company has deemed the car irreplaceable for the amount of money it’s worth. In other words, if the car has been stolen and not recovered before the end of four weeks so the insurance company pays for it before it’s been recovered, or if it was in an accident and the damage was so extensive that repairs would cost more than the car is worth, a salvage title may be obtained.
What you need to do first is find out the car’s value on KBB. If you’re buying from a private party, after you select the correct car, trim level, and mileage then you need to indicate the option of “sell to a private party.” If you’re buying from a dealership, select “trade-in to a dealer”. Going through this process is treating the car as if you’re selling it yourself, and in that way you’re finding the most realistic value. Compare that with the car’s retail or trade-in values on Edmunds, depending on if you’re buying from a private party or dealership. All of these numbers should be pretty close to each other.
Next, you need to find the market value of the vehicle, and to do that NADA is a good resource to start at. Next you need to add the retail to the trade in value from one source (KBB, Edmunds, etc), and then divide by two, and that will give you the car’s market value. Next, you need to call your insurance provider and get the percentage by which they calculate salvage car values, and then multiply the market value by that number. So if your insurance company tells you they calculate the salvage value by 75%, a $10,000 market value car will be worth $7,500 as salvage.
If you’re about to buy a salvage title car with some damage, where it’s clear why the salvage title was obtained, you can try and find out if the damage can be repaired and if so how much money it’ll cost. A good way to find out is to either call a shop and get an estimate, or consult an online resource like RepairPal.
Buying a salvage title car doesn’t necessarily mean something bad happened. It could mean the car was stolen and then recovered after four weeks. Remember that no matter what car you plan on getting, do your due diligence, and always have it inspected by a licensed mechanic before you buy.
Marketing @ Instamotor. Dog lover, NBA fan, nerd at heart.