The only difference between a "Salvage" title and a "Clean" titled one is most insurance companies won't give you comp and collision on a car with a "Restored Salvage" title. Also, most dealerships won't take it as a trade-in. AS MOST ALL OF MY CARS SELL FOR LESS THAN $2500 there is no reason to keep anything other than good liability insurance. Any car is worth $1000 in parts. So you would be paying $50 a month on comp/collision to protect $1000-$1500 bucks worth of depreciating book value. Secondly, why would you trade this $2500 car in for the piddly $500 they are going to give you?
What does it mean when someone asks if the title is "Clear"? They want to know if there is a lien on it. Say, a Title loan or a balance with a finance company. If the title is unencumbered in any way, it's called a "Clear" title.
Most people are afraid of any car with a "Salvage" title, but it is music to my ears. Each state deals with these kinds of cars differently and Arizona happens to be one of the easiest in dealing with these projects. When a car is in an accident (Phoenix has many), if the cost of repairs is more than half the Blue Book value, the insurance company can "Total" the car. If you have ever had a car repaired by your insurance company through a licensed shop, you know the racket...it is spendy! So, what is a "Salvage" title?
A salvage title is the piece of paper that is used to buy and sell the vehicle after the accident. It cannot be driven or licensed for the open road until it's been repaired, then inspected by the Police at any one of the Valley DMV's that have an inspection station. To get it inspected you will need the salvage title, your driver's license and $50. You walk in, sign the clipboard and wait for the nice officer to call your name. They do not care about the check engine lights or air bag lights or if your car has passed emissions. They do care about window tints, door handles, glass, lights and signals. They will also check the VIN (vehicle identification number) number and run your license. They can and will bust you right then and there if your driver's license or car are not clean. If your car passes, I would say 90% of the time, they issue a slip that will make your title "Restored". As long as your car now passes an emissions test you can get your plates and tags just like any other clean titled car.
A car with damage on two panels (door and fender) can get salvaged. They don't have to be total wreaks with twisted frames and major engine damage. Yet most of these cars head right to the auction yard where they are picked up by scrappers, pick n pulls, and wary car guys trying to make a flip. Remember, you are legally only allowed to "flip" four cars per year in Arizona without a dealer license. One has no idea what has happened to this car from the time it's moved from the accident scene or home to when it's placed at your feet by the giant forklift in the yard after you've purchased it. If the car has been towed wrong it can burn up the transmission. Cars get started and are run with no oil or coolant. The forklifts can damage sensitive undercarriage parts. And, fuel pumps can be burned up by repeated starts, just to name a few of the hazards involved. To make matters worse, many auctions won't even let you start the car, let alone drive it, so there is no way of knowing if the engine runs or if the transmission is any good or not. No tranny and you ain't got squat.
"Where road kill comes back to life!"
I buy hundreds of cars at the auctions and have been through hell and back. I've learned the hard way and now I know what I am doing and the telltale signs. So, in short, the deal all comes down to, picking a salvage winner and the time and the $50 bucks to run to the DMV for 2 hours to fix the title. That's when the real fun starts - turning that salvage winner ugly duckling into a swan. Ok, maybe not a swan, but a honest, dependable ride that won't put you in the poor house.
I would say that a third or more of my inventory contains clean titled cars. I do get trade-ins and find other clean titled cars when I'm hunting around Craig's list. You would also be surprised how many classics I come across from estate sales and at the liquidation auctions.
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