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How to Insure a New Auction Vehicle

insure auction vehicle

Buying a new auction vehicle can be exciting. However, it’s easy to get lost in the heat of auction bidding and forget a few small items, such as insurance.

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Remember, you won’t be able to enjoy your new car until it’s covered by your insurer. It’s essential to understand the different factors at play so you can avoid any issues that may prevent you from driving home your prize. Here are some tips to help you find the right car insurance when purchasing a new auction vehicle.

1. Estimate the Cost

Car insurance rates vary depending on the type of vehicle being covered. Make sure you can afford to insure the vehicle you’re bidding on. Finding out how much the car insurance will be on a vehicle helps you get a better idea of the overall cost you’ll be paying at auction.

Since all drivers are required to carry liability insurance by law, it’s important to evaluate your liability coverage. It protects you and pays medical bills and other damages in the event you cause a car accident that injures other people.

You might also want to add other coverages to protect your assets. When weighing between different coverage choices, you should think about the value of your car. Consider whether adding these options to your plan is a worthwhile investment:

  • Collision coverage pays for damages to your vehicle. Usually, this insurance is required if you have a car loan. There is also a deductible – the amount of money you have to pay out of pocket. Your insurer pays the remainder of any repairs costs once you have paid your deductible. Keep in mind that adding collision coverage to your car insurance policy will increase the cost of your monthly premium. 3 major factors affecting the price of your collision coverage are the value of your vehicle, your driving history, and the amount of your deductible.
  • Comprehensive coverage pays for damages to your car that aren’t caused by a collision, such as natural disasters, animals, civil disturbance, fire, theft, falling objects, and vandalism. This type of insurance is often required when you lease a vehicle. However, if you have paid off your car, comprehensive coverage is optional. Similar to collision coverage, there is usually a deductible.
  • Medical payments coverage pays your medical bills and those of your passengers after a car accident, regardless of who causes the crash. Depending on your state, you might be required to buy this insurance. It’s also known as Med-Pay, or Personal Injury Protection (PIP). Generally, medical payments coverage is one of the least expensive types of coverage options.

When it comes to car insurance, it’s also a good idea to research other variables that may increase your premium rates. One of the most common factors that can significantly affect your insurance costs is owning a salvage title vehicle. Always check the vehicle history report to see if it has been involved in a serious accident or had any substantial modifications or repairs. At the same time, cars at a higher risk of being stolen may result in higher rates.

2. Choose a Good Insurance Rate

Take your time to shop around for the best rate. Get at least 3-4 car insurance quotes so you’ll know what to expect. Start by searching for rates online. A.M. Best is a good resource for different types of insurance and ratings for most insurers. Likewise, and are two independent sites that allow you to search for instant quotes.

When comparing different insurers, consider both premium coverage plans and any discounts the company may provide. There are various reasons why insurance providers may offer discounts, such as vehicle safety features, student discounts, and good driver discounts. In many cases, insurance companies don’t volunteer this information. Thus, it’s best to do your own research to determine which discounts you may qualify for.

There are also other ways to bring down your premium, including insuring multiple cars with the same provider, raising your deductible, paying your premium in full up front for the year, and having other types of insurance policies with the same company, such as homeowners or renters insurance.

3. Check Your Policy

If you’re replacing your old car, it’s recommended to check the terms of your current policy. Very often, a newly purchased vehicle is automatically covered for a short period of time (often, a 30-day window) before you need to adjust or set up an additional insurance policy for your new vehicle. Call your insurance company to inquire if you have this benefit.

If you have an existing insurance policy, it’s possible to add a new car to your current policy before you sign the title. Many providers offer multi-vehicle discounts which reduce the cost of additional vehicles added to the policy. You’ll need to provide the insurer all the details about the vehicle such as the VIN, the policy’s effective date, the purchase price, and various other important items.

If you shop around for a different insurer, find out exactly how long you current car insurance will extend as well as the start date for your new policy. Be aware that there might be potential costs involved. You may find yourself subject to early cancellation fees or coverage gaps which leave you driving illegally without insurance, exposed to major financial risk if an accident occurs, and facing higher premiums in the future.

Finally, purchase the car insurance after you have paid for your new auction vehicle. Since proof of insurance is required by law in most states, make sure you have a copy of your insurance card in case you are involved in an accident or get pulled over. Drive safely and keep your credit history clean. Having a bad driving record and/or a high credit score can increase your insurance rates.


Insurance is a crucial step of purchasing a new car. Should you find that perfect vehicle, take your time to do your due diligence and make sure you have everything in place to avoid any unwanted surprises. By following these tips, you’ll be able to drive home happily in your new auction win.

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How to Read Vehicle History Reports

vehicle history report

These days, when you buy a car, there is a wealth of information available at your fingertips. The problem is finding what’s important and understanding the meaning of it all. Buying a used vehicle can be an extremely frustrating and confusing process.

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Obtaining a Vehicle History Report (VHR) is the smartest way to learn everything you can about the vehicle you’re considering. Here, we’ll inform you about the most essential parts of a VHR, what they mean, and red flags to look out for when buying. Please remember that state laws for VHRs vary widely. If you are unsure or would like more specific information, contact your state DMV.

The Basics

A VHR is a tool for buyers to positively identify a vehicle and accurately describe its condition. Here’s a quick run-down of the information that you’ll need to verify first.

1. Make and Model

This is the easiest step. Does the car you’re looking at match the details on the report? It may seem obvious, but VHR-tampering can occur at the most basic level if you don’t pay attention. Make sure to check for the car’s year, engine size, and color. Popular models will have a lot of used vehicles on the market, so be sure the seller hasn’t re-used a VHR from a different vehicle.

2. Odometer

The miles on the odometer may not exactly match the report, but it should be in the neighborhood and certainly not lower than recorded. Some states may not require mileage to be reported if the car is too old, so check with your local DMV.

3. Number of Previous Owners

This is important to know because if a car has had a long string of owners for short periods of time, there may be chronic malfunctions that have caused it to change hands. Also check for missing periods of time when possession is unclear. This may indicate illegal activity or misuse.

4. Vehicle Identification Number (VIN)

This is the most foolproof way to check the identity of your car. Each vehicle has a unique VIN, so by checking it, you can be absolutely sure that what is on the report will correspond to the vehicle you are examining.

Detailed Information

Now that we’ve gone over some of the basics, let’s delve a little deeper. A VHR will include a full report of the major events within a car’s lifespan. Here are the biggest points for you to pay attention to:

1. Title Status

The title status of a vehicle can give you many good clues. Look out for words like “loan,” “lien,” “lease,” or “correction.” By themselves, these conditions aren’t necessarily bad. Lots of people lease cars or the DMV may have made a mistake that needed a correction, but these factors are important to consider within the context of the rest of the VHR.

2. Registration

This pertains to the yearly registration tags for the license plate on the vehicle. The biggest thing to look out for is years without registration. This may indicate that the vehicle was out of commission from an accident or other damage, or that it was stolen or used illegally. All of these could have a huge impact on the condition of the car. Even without damage, it may be difficult to find financing or insurance for stolen vehicles or those used illegally. It’s extremely important to know about these factors beforehand.

3. Emission Inspection

It is mandatory that all vehicles pass emission tests. You should be wary of cars that have not passed these inspections. They are illegal to drive and the repairs can be very costly. If the car has failed emissions in the past but has passed more recently, it should be fine. However, if the inspection was recently failed, you may want to look elsewhere for your next vehicle.

Buyer Beware

So, you’ve verified the vehicle on the report is the same one sitting in front of you and the basics seem to look good, but you’re not quite done yet. There are some keywords that you should look out for that may indicate the vehicle is in less-than-optimal condition.

1. Auction Listing

Auctions are a great way to find vehicles for a bargain and there are many legitimate reasons why a vehicle may be up for sale, such as personal unsold cars or fleet vehicles. Some auction vehicles may need repairs. You should also remember to check when the vehicle was last inspected and/or when inspection is due. It’s always a good idea to ask if you can have your own trusted professional inspect the vehicle.

2. Rental

This term is used for vehicles that were part of a rental fleet, not a car that has been leased. The condition of these cars may vary greatly. Some rental services will try and wait as long as possible to have a car serviced or repaired to save money which can have a detrimental effect on the vehicle.

3. Repossession

The condition of the car may be good, but the red flag here is a financial one. A vehicle may be unaffordable for many reasons, such as high gas prices or insurance premiums. You may want to double check to be sure you can afford the vehicle. Also, if the previous owner couldn’t afford regular payments, he or she may not have had the funds for routine maintenance or repairs, either. This is something to keep in mind.

4. Salvage Title

When a car has a salvage title, you need to pay special attention to the details. It may be an opportunity to save some money, but it may also come with several drawbacks. The term “salvage title” has many determining factors which vary from state to state.

A salvage title vehicle may have extensive damage; a questionable history due to illegal use or being stolen; or it might just be an older car with a ding in the fender. Discovering exactly why a car has a salvage title can save you a lot of money – either by buying the car affordably or by avoiding it altogether. 

5. Accidents

Many vehicles have been in accidents, and the older the vehicle, the greater the chance. While minor accidents are understandable, you should be wary of a vehicle with a major repair or a long history of repairs. It’s especially important that all repairs were performed by a professional. Home repairs or repairs done cheaply to maximize profit for resale may put you at risk for malfunction or injury.

6. Water, Storm, or Fire Damage

These forms of damage are dangerous particularly because they are hard to assess. The damage may seem largely cosmetic, but the effects could be much worse in the long-term. You may not even realize there is a problem until it’s too late. It’s especially important that you have the electrical systems checked.


To see all these points in action, check out sample VHRs from Carfax and AutoCheck.


Now that you’re a pro at understanding VHRs, the process of buying a used vehicle should be much more clear. By checking the most important pieces of the report, you’ll be able to recognize potential drawbacks and make an informed decision that will keep your family safe on the road.

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10 Best Cars for Teens

best cars teens

If your teen just got their driver’s permit, it’s time to think about getting them a car. Most likely, they will love the freedom and independence of their own vehicle, but having the right “ride” is more important than just a “cool” one. Which model is right for a first-time driver?

As a parent, your key considerations are most likely the car’s safety, reliability, and cost. If you are reading this, you probably already agree with us: a used car is a great option. Used vehicles have already been tested and proven reliable, and you won’t break the bank to get a fantastic deal. Standard safety features are found on most models from 2008 or later. You can get a cheaper car from earlier than 2008, but much older models may require more repairs and increased maintenance costs.

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To help you begin your search, we’ve created a list of reasonably priced, medium-sized cars. We believe cars of this size offer your teen more protection than compact cars. Your new driver may ding and scratch larger sedans in tight quarters or be more likely to crash cars with a higher center of gravity, like an SUV. Extra features, like Bluetooth connectivity (while important for hands-free calls) and stylish interiors are a bonus for teens, but we chose to focus this list on the basics.  Unless otherwise noted, models and mileage are quoted from the 2008 version of the cars.

And now, in no particular order, our top 10:

Honda Civic

Engine: 1.8-liter, 4-cylinder

City/Highway (mpg): 26/36

We are starting our list with a standard small car that has been rated year after year as a top pick in safety, value, and overall best buy. It handles smoothly, but with no notable pickup. Be sure to double check what features are on the car, as the base model can come without any extras, like air conditioning or power locks.  

Chevrolet Malibu

Engine: 2.4-liter, 4-cylinder

City/Highway (mpg): 22/30

Next on our list is a bigger and more sturdy option. With additional space and a more powerful engine, you can handle a car full of people more comfortably than with the Honda Civic listed above. There is also a hybrid version that offers slightly better gas mileage.

Toyota Prius

Engine: 1.5-liter in-line with a 50-kW electric motor

City/Highway (mpg): 48/45

For the environmentally conscious buyer looking to add a car to the family without adding pollutants to the atmosphere, the Prius is the way to go. It’s mix of electric and gasoline gives great mileage, low to no emissions, and a quiet ride under 30 mph. While the electric engine does take up some space, it is still comfortable for 4 adults. This is one of the more costly cars on the list and as such, more price conscious buyers may want to look at the Toyota Corolla.

Toyota Corolla

Engine: 1.8-liter, 4-cylinder

City/Highway (mpg): 28/37 (manual), 26/25 (automatic)

Another solid car with almost 40 years of reliability history, the Corolla is a compact sedan offering low emissions with a traditional gas engine. While it may not have as many features as other cars in its class, like the Honda Civic, it has some of the best resale value and one of the most efficient engines.

Nissan Altima

Engine: 2.5-liter, 4-cylinder

City/Highway (mpg): 23/32 (manual), 23/31 (automatic)

The Altima could be a good choice for those looking to find a car with more interior space and extras. You might be able to find this mid-sized sedan with more customizations than its competitors.

Mazda 3

Engine: 1.8-liter, 4-cylinder

City/Highway (mpg): 26/36

This small car balances fun with safety. It’s great responsiveness and pickup are helpful for a teen maneuvering away from a potential collision. A repeat IIHS Top Safety Pick from 2010 on, the Mazda also boasts 30 mpg in fuel efficiency and a stylish interior. It comes in a hatchback version as well, making it convenient for a teen heavily involved in athletic or after-school programs.

Scion xB

Engine: 2.4-liter, 4-cylinder

City/Highway (mpg): 22/28 (manual/automatic)

A unique looking car and another previous IIHS Top Safety Pick, the Scion xB comes as an affordable basic package with many options for user customization. With some investigation, you’ll be able to find an excellent price on a base model without added frills. This is a solid choice for those who have big items to transport as the seats fold flat, giving lots of cargo space. The 2008 and newer versions offer more power than the older models.

Kia Soul

Engine: 2.0-liter, 4-cylinder

City/Highway (mpg): 24/30

The Kia Soul has a big personality and a standard engine. It’s boxy form, like the Scion xB, gives lots of interior space and positions the driver to be higher than sedans, providing a clear view of the road. This car is quoted at its starting year, 2010.

Ford Focus

Engine: 2.0-liter, 4-cylinder

City/Highway (mpg): 24/35 (manual), 24/33 (automatic)

Here’s one of the smallest and simplest cars on our list. Like the Civic and Corolla, the Focus comes with a few extra features, such as power windows and power locks.. This is an affordable car and a great choice if you want your teen to learn to drive stick.

Toyota Tacoma

Engine: 2.7-liter, 4-cylinder

City/Highway (mpg): 20/26

Yes, we did include a truck on this list. It has a better engine than sedans and comparable responsive handling. Like all Toyotas, it’s well known for its reliability. Older Tacomas are smaller than their current counterpoints and the 2-door version will be lower in price than the 4-door. Finally, it has the option for 4-wheel drive, offering good versatility for certain locations.


Hopefully, you’ve picked up some strong leads from this list and found some cars to investigate further. Keep an eye out for deals that blend the safety features you need and the style your teen wants.

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Questions to Ask When Buying a Used Car

questions buying used car

You’ve probably heard the saying: “It is better to prepare and prevent than it is to repair and repent.”

When it comes to buying a used car online, it’s not all about getting a good price.

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It’s important to get some perspective about an advertised vehicle and the seller before you decide whether it’s worth a trip to take a closer look. Think of this process as an interview to ensure no hidden problems will surface once you extend your hand and sign the contract. It’s also a great chance to use your leverage to obtain a sweeter deal.

So before saying “yes” to a used car, here’s a list of basic questions you should ask to help you fill your needs and rule out some vehicles before ever leaving your home.

1. How many miles has it been driven?

A vehicle’s mileage helps determine its value. If the odometer has a significantly high mileage, ask why. A car with high mileage due to the owner having long highway commutes is better than a low mileage car that did a lot of short trips or was used for a delivery route. This information will also be important during negotiations. Always research and determine the car’s value before meeting the seller.

2. How is the condition of the vehicle?

Pay attention to how the seller responds to this question. Make sure to ask follow-up questions. Be specific about the vehicle’s structural and mechanical condition.  

buying used car

3. Why is the owner selling the vehicle?

Be aware if the seller says something odd or tries to evade the question by telling an interesting story. Likewise, if the seller answers your question nervously, it’s not a good sign. Look for a reasonable explanation. You don’t want to end up buying a “piece of junk.”

On the other hand, some sellers are going to be honest. They might say something like, “It drinks a lot of gas,” or “I just bought a new car.” Take advantage of the situation when you hear answers like these.

4. Are they the original owner?

If the seller is the original owner of the car, great! He or she should have all the maintenance records.

If the seller isn’t the original owner, ask for a record of previous owners. If they don’t have these records or if the vehicle has had more than one previous owner, you should be able to find some basic information from a vehicle history report (VHR).

5. Where did the seller originally buy the vehicle?

Knowing the previous owners isn’t enough. It’s important to know from which state the car was bought.

Laws are different from state to state. Some states allow used vehicles to be sold with little concern about their history. This means even if the seller is the original owner, he or she could move from one state to another state and clear the title of any negative records, such as a salvage label. Moreover, information about a car’s geographical background can imply potential weather-related problems. A vehicle’s past locations can cause some significant damage, such as extreme heat, flooding, or snow and icy road conditions.

6. Has the car had any recent or major repairs?

Has the vehicle ever been involved in an accident? Vehicles that have had repairs or that have been in collisions are more likely to give you a lot of headaches. They’re also worth less. Watch the seller’s response.

buying used car

7. Are they offering to let you see the service records?

Be picky. Ask for any records the seller has for the car, including things as simple as tire replacement or oil changes. An owner who is meticulous enough to keep maintenance records probably takes good care of the vehicle.

8. Do they have a title in-hand?

Don’t just take the seller’s word for it; make sure they have a title (or equivalent paperwork) ready for when you agree to close the deal.    

9. How long will the seller allow you to take the vehicle for a test drive?

Do your best to avoid buying a used car without a test drive. If the seller denies you a test drive, it may be time to walk away. Some sellers, such as government agencies, may not allow test drives for legal reasons. If this is the case in your situation, consider how well you trust the seller’s information about the vehicle.

If you’re granted a test drive, it’s time to be picky. Usually a test drive is limited to less than 30 minutes. This is your best chance to discover any issues with the vehicle, so use your time efficiently.

You should test the car on multiple road surfaces and at varying speeds. Try to simulate whatever type of driving you do on a daily basis, such as highway driving or in stop-and-go traffic. See how the vehicle merges with traffic. Take several corners and turns. Are you comfortable with the seat? Can you clearly see the instruments and access the controls easily? How difficult is it when reversing into a parking space?   

10. Will the seller allow you to write down the VIN?

Having the VIN will allow you to obtain a full vehicle history report (VHR) from a company like Carfax. This is especially important if the seller is not the original owner of the car or if any records are missing. It’s never a bad idea – no matter how much information a seller offers you – to get a full VHR.

11. Can you have the vehicle inspected independently?

If the seller hesitates, it’s a warning sign. Look for that one answer: “Yes, no problem!” Get a mechanic you can trust to look at the car. This is the best (and safest) way to find out what’s really going on underneath the hood and to address any problems that could flare up later.

12. How much is the seller asking for the car?

This question suggests that the quoted price by the seller should be negotiable. Depending on how long the car has been on the market, the seller might come back with a decent discount.

The more information you have about a used car, the better. Asking these questions will give you a good idea about whether you should consider taking a vehicle home with you or not. It also provides you with a record of a seller’s responses. You’ll be able to discover any conflicts between what the seller told you and what you see during the test drive and inspection.


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How to Find and Read a VIN

read VIN
The number of used cars available to buy online can be intimidating. You can find any car you want and filter down to the right transmission, year, mileage, and color. It’s an exciting process and the pictures on the listings often look great!

But how do you know how dependable a vehicle will be or about its true history? There’s a key piece to online vehicle listings – one you might have overlooked in your original search. This is the VIN and it will help you get the full picture of your potential new ride.

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What’s a VIN?

VIN stands for vehicle identification number and is a standardized 17 character code (VINs include both letters and numbers) that lets manufacturers, the government, and consumers track a vehicle. The current standard was established in 1981 by the National Highway Traffic Safety Administration (NHTSA) in response to the growing number of manufacturer specific identifiers. To learn more about its history, the NHTSA has a short description on their website.

This standardization is good for the average consumer because it allows you to use one system to track cars as well as outline which standardized parts to use when you need to do repairs. VINs are not unique to cars and can be found on trucks, motorcycles, and any other vehicle that needs to be registered at the DMV. The VIN is essential in used car buying because it allows you to look up a vehicle history report (VHR) and track when and where a vehicle was made, sold, and repaired.

Finding a VIN

A VIN can be found in a vehicle’s official paperwork (the title and registration) and on the vehicle itself. Each manufacturer can place it where they want on the car. The VIN can also be found in insurance documents and in the owner’s manual. If the vehicle has been repaired, it will also be found in manufacturer-associated body shop repair records. If the car was stolen and not recovered, it will be in a police report.

No access to paperwork? No problem. The VIN is always found on the car itself. Most commonly, you will find it on the bottom of the driver’s side dashboard or under the hood at the front of the engine. Other places to check would be on the driver’s side door jamb or in the wheel well. To get a few more ideas on where to find the VIN, check out the DMV online.

Interpreting a VIN

Each of the 17 characters in a VIN tells you something about the vehicle. It can be broken up into three sections – each one telling about a different part of the vehicle.

Digits 1 – 3: World Manufacturer Identifier (WMI)

This segment explains which country the car was built in, the vehicle manufacturer, and the vehicle’s type or manufacturing division, respectively.

Digits 4 – 8: Vehicle Descriptor Section (VDS)

These numbers explain the model, body style, engine type, and transmission of the vehicle. This section of the VIN is particularly useful to repair shops – and to you if you plan on fixing up a used car – because it helps identify the correct parts to use. Double check this with VIN lookup sources, as each manufacturer has their own method for coding this section.

Digit 9: Check Number

Digit 9 is called the check number and is used to detect an invalid VIN according to a special formula. The check digit determines how to translate the other 16 digits in the VIN to establish whether it’s real without needing to contact the manufacturer or another source. For more information on how this works, check out the formula.

Digits 10 – 17: Vehicle Identifier Section (VIS)

The last several digits pertain to the vehicle itself. Digit 10 is a character that translates to the manufacturing year and digit 11 is for the manufacturing plant where it was assembled. The last 6 digits are the vehicle’s serial number. This numbering is unique to each manufacturer and relates to the order vehicles are completed at the plants.  

Decoding a VIN in “Real Life”

Let’s walk through this quickly and work through an example. Imagine you’re wanting to get a Toyota. You know they put their VIN on the top left side of the dash, so you check there and find it.


Let’s look at each piece. The WMI is 3TM; VDS is CZ5AN5; the check number is 5; and VIS is GM015742. Broken down, what does all this stuff mean?

  • WMI: 3TM. This means the manufacturer was Toyota de Mexico and it was made in a US plant.
  • VDS CZ5AN5. It’s a Toyota Tacoma.
  • Check Number + VIS: 5GM015742. The vehicle check number is 5 and the serial number is 015742. It was made in 2016 and the approximate mileage is “new.” We can also tell from this number that the car was actually manufactured in Toyota de Mexico’s Baja, California plant.

This is about the extent of free information. If you want more information – such as mileage per previous owner, police reports, and recall information – you might have to pay, depending on what state you live in. A great overview of basic decoding for a number of brands is provided by the National Insurance Crime Bureau (NICB) in their Passenger Vehicle Identification Handbook. The most recent editions cost money but earlier editions can be found online.

Using a Vehicle History Report (VHR)

The vehicle history report (VHR) is a document that can’t be made up or hidden from you and it will tell you accurate information about a vehicle, not give you a sales pitch. As a used car buyer, this is the information that you need to make the most informed decision. The NICB has a free service to determine if a car is reported as stolen or reported as salvage. In addition, the National Motor Vehicles Title Information System (NMVTIS) gives a list of its approved VHR providers. Private companies, such as Carfax, can provide their own reports for most used cars.

VIN used car

When checking through this detailed information, look for whether the manufacturer’s warranty is still in place. If the warranty is in place and the car fails, you might be protected under your state’s lemon law. The VHR also tells you how many times the car has been sold and the approximate mileage at each transaction. Repair records will tell you whether the car has been in any accidents and if it needed serious repairs. You can also find safety recall information and whether such issues were solved. Finally, the VHR will also tell you if the car was reported as stolen or is considered a salvage car.

Now that you’re a VIN expert, you can get more information than something like “red 4 door 2016 Toyota Tacoma” for the vehicles you’re considering. You’ll be able to learn about the future reliability of the car and a little about how it was handled by its previous owners. Avoid the headaches and get the used car you want.

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What is a Salvage Title?

salvage title

Buying an automobile is something many people do within their lifetimes, but often, they don’t have much practice at making the best deals. When it comes to buying used vehicles, there’s more to it than just negotiating a price. Buying used means you’ve got to do more research.

When you’re not a veteran vehicle purchaser, it can be extremely confusing and exhausting to try and sift through unfamiliar vehicle terms. If you’re trying to save as much money as you can, you might even consider buying a salvage title. But what does that actually mean?

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The Meaning of a Salvage Title

First, and most importantly, let’s discuss what a salvage title is. Simply put, a car with a salvage title has been deemed a “total loss” – the cost of repairs would be more than the value of the vehicle – by the insurance company. This seems straight-forward, but the devil is in the details.

There are many reasons that a car may be determined a “total loss,” including damage from accidents; hail; flood; fire; deployment of safety features, such as air bags; and in some states, theft. To make things more complicated, each state has its own guidelines to determine if a car is a “total loss,” so a car with a salvage title in one state may not be considered a “total loss” in another state.

Now, you may be thinking, “Hold on, if the car was totalled, why should I buy it?” Just because a vehicle has earned the salvage title label doesn’t necessarily mean that it’s undrivable. The Consumer Federation of America reports that each year, nearly 2.5 million cars are totalled and nearly 1.5 million of them are repaired and returned to the road. Many of these cars are a bit older and have already depreciated in value, so even damage from a minor accident could exceed the value of the vehicle, though they still operate well.

5 Benefits of Buying a Salvage Title

Once you realize that a salvage title isn’t a death certificate for a vehicle, there are several reasons why buying a one could be beneficial to you.

1. Cost

A car with a salvage title that has already been fully-repaired may sell for a significant amount less than a car with a clean title. You can easily save thousands of dollars by buying a salvage title. The most important thing to consider is whether the repairs were done by a qualified professional.

2. Cheap Insurance

Though some companies may not cover salvage titles, if you shop around, you’ll eventually find one that does. Because the car is devalued in the eyes of the insurance company, this means you will receive a lower premium to cover the car. Not only is the car cheaper to buy, but it will continue to save you money on your monthly insurance bills.

3. No Resale

This might seem like a negative at first, but it means you can maximize your own use of the car. You don’t have to worry about the value of the car falling because you won’t try to sell it later. For example, small cosmetic damage from backing into a pole won’t be a huge source of stress.

4. Ability to Use Two Cars

Many people buy one nice car for family trips, special events, and more; but they’re afraid that putting too many miles on the car will lower the value for resale. By using a salvaged vehicle for day-to-day driving or messy jobs that may cause damage, you can avoid extra wear-and-tear on your family vehicle and increase your resale profit a year or two down the line.

5. Rebuild It Yourself

If you’re a hobbyist or professional mechanic, buying a salvage title not only saves you money, but gives you something to work on. Buying a car before it is repaired will save you even more money on top of the reduced price. When considering a buy, be sure you take the future cost of parts into consideration of the total price.

salvage title

Things to Think About When Buying a Salvage Title

Salvage titles do have a lot of advantages, but there are some things you need to consider carefully before buying.

1. Low Resale Value

While we think “no resale” is a benefit, it still comes with a drawback. Simply due to the salvage title label, many people will be scared away from purchasing the vehicle if you ever choose to try and resell it. It is very likely that once you buy a salvaged car, you will be the owner for the rest of that car’s life.

2. Harder to Insure/Finance

It is extremely important that you contact your insurance company before you purchase a salvage title. While there are companies out there that will cover them, your primary auto insurance provider may not. Insurance companies are often wary of salvage titles because of the vehicle’s history. It can also be very difficult to determine the true value of the vehicle. In addition, this means that banks may be reluctant to offer loans for the car. For this reason, many salvage titles are bought with cash upfront.

3. Hidden Damage

This may be one of the biggest risks with a salvage title, particularly in the case of flood or fire damage. Even if it appears minor, water and smoke damage can be difficult to detect and can cause major issues later. Be especially careful to have the electrical systems inspected by a professional.

4. Safety

It doesn’t matter how much money you save if your vehicle isn’t safe. There’s no reason to buy something that endangers you or your family. Be absolutely sure to have the vehicle inspected by your own trusted mechanic. Pay special attention to safety features, such as air bags and safety belts. Dishonest sellers may skimp on repairs to increase their profits.

5. Fraud

Because different states judge salvage titles differently, beware of “title washing.” This means transferring a car across state lines to take advantage of more lenient laws. Cars with significant damage may be resold under a new, clean title in a new state; or miles may have been tampered with. It’s extremely important to check the history of the car.

Buying Smart

Here are some tips to use when buying a salvage title.

1. Contact the DMV

This should always be the first thing you do when considering a salvage title. States may use different vocabulary, such as “rebuilt,” “totalled,” “reconditioned,” or “junked” instead of “salvaged.” They may also be printed on different colored paper. You may also learn that in some situations, you may be required to hold a salvage license in order to buy and/or sell salvage vehicles.

2. Physical Inspection

Check both the vehicle itself and the title for signs of tampering. This is always a good idea when buying a used car, but it goes double for salvage titles. Take pictures of any visible damage.

3. Check Records

There are lots of ways you can check the history of the vehicle, including service records and third-party websites like CarFax or AutoCheck. The National Motor Vehicle Title Information System is incomplete, but also may be helpful. For licensed dealers, check the Better Business Bureau. If the seller is unwilling to provide proper documents, this is a huge red flag.

salvage title

4. Contact Your Insurance Company

There’s no use buying a vehicle that can’t be insured. This step is absolutely necessary before the final purchase.

5. Negotiate Price

Because so many people are intimidated by salvage titles, it’s a buyer’s market. You should be able to negotiate any price down from the initial asking price. This is especially true if there are plenty of vehicles of your chosen make and model available with clean titles.


Salvage titles can be a great investment when you’re looking to buy a vehicle. Though they do pose a few more risks to consider and require you do a bit more “homework,” they can still be very dependable cars and save you a lot of money.

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