Large outdoor fountain in park with city and blue sky in background

The Pros and Cons of Owning Salvage Vehicles 

Have you ever considered buying or keeping a car or truck that has been damaged in an accident, but you’re just not sure if it’s the right decision for you? You’ve come to the right place. We’ll take a close look at what salvage vehicles are, your options following a total loss, and the pros and cons of owning one. First, you may want to ask yourself why you would want to own a vehicle in disrepair. You’d be right to assume these automobiles are cheaper to keep or buy compared to a similar vehicle (without damage) on the road, and who doesn’t love a great deal? However, before you dive headfirst into the murky waters of cars that have been damaged because of an attractive price tag, it’s best to do your homework in order to make the decision much clearer.

What Are Salvage Vehicles?

When a vehicle is involved in an accident and sustains damage, depending on the extent of damage and the value of the car, the insurance company may consider it a “total loss.” Typically, when people hear the word “totaled” referring to an auto accident, they assume the accident was severe, and the car or truck is smashed up beyond repair. While this scenario is true some of the time, there are many accidents that take place involving vehicles that have what would appear to be minor damage, but because of their low value (based on fair market value) it makes more financial sense to forego repairing them. 

After an accident, your insurance carrier will determine the value of your vehicle, and the cost for repairs. If the cost of repairs outweighs the value of the car, your insurance carrier will determine your car or truck is a total loss. In the state of Pennsylvania, you are required to notify the Department of Motor Vehicles to inform them your insurance carrier has deemed your vehicle a total loss. Once PennDOT has been notified, you will be issued a salvage title, and will no longer be permitted to operate your vehicle. While this might sound like a tragic end to an epic movie, the Commonwealth of Pennsylvania has provided a way for you to choose how the story ends.

Your Options Following A Total Loss

Generally speaking, you have some options after your insurance carrier has determined your vehicle is a total loss from damage that may have resulted from a covered comprehensive or collision loss. Let’s consider the two possible options that involve retitling your vehicle. Typically, you will have the choice between a full settlement and a partial settlement:

• Full Settlement – Usually your insurance carrier will send you a check for the full amount of the damages minus the amount of your deductible, or other deductions, according to your insurance policy. At this point, you would sign over the title, making your insurance carrier the owner of the vehicle. Typically, this is the option most insureds choose.
• Partial Settlement – In this scenario, you would remain the owner of the vehicle and can make one of two decisions:  

1.) Apply for a salvage title, have the vehicle repaired, inspected and drive it once again after obtaining a reconstructed title. Generally, your insurance carrier will pay you for partial damages and will provide a retention letter (aka buy-back letter) as proof, so it’s very important you keep this letter in a safe place.

2.) Sell your vehicle on your own to a local scrap yard.
If you are leaning toward the partial settlement option and retaining the salvage of your totaled car or truck, you should also consider that your insurance company cannot issue the settlement payment to you until you have obtained the certificate from the state. So, it may take longer for you to receive the payment of your claim.

Also, it would be more difficult to exercise the partial settlement option if you do not hold the title to the vehicle. If there is a loan on your vehicle, you would be responsible for obtaining the vehicle title from the lienholder by paying the outstanding balance of the loan before you can request a salvage certificate from the state to settle your claim.

Note: Important PennDOT forms for accepting a partial settlement:
Form MV-6: Applying for a Salvage Vehicle Title in Pennsylvania
Form MV-426B: Applying for a Reconstructed Vehicle Title in Pennsylvania

Consider the Pros and Cons

As previously stated, if you’re thinking about purchasing a car or truck that has been considered a “total loss,” the cheap price will likely be attractive to you. This cheaper price applies to both buying salvage cars and retitling them after a total loss instead of buying a new vehicle. Before you take advantage of what appears to be a “great deal” you need to consider the pros and cons:

PROS of Salvage Vehicles:
- Cheap Price: The sticker price will usually be significantly less than a similar vehicle without damage.
- Savings Opportunity: If you decide to have your vehicle repaired after it has been deemed a total loss, it would probably be cheaper than buying another car or truck.
- Personal Thrill: If you possess the knowledge and skillset to fix and rebuild cars and trucks, buying or keeping a damaged vehicle may bring some enjoyment.

CONS of Salvage Vehicles:
- Unseen Damage: After an accident, there may be additional hidden damage that you simply cannot see; this can be operationally problematic.
- Safety Concerns: Even after repairs have been made, it’s possible that some vehicles will not operate as they were originally manufactured, which may compromise your safety.
- Required Documentation: There will be additional paperwork to have your vehicle retitled, which usually includes a required mechanical inspection.
- Insurance Challenge: Depending on your insurance carrier, there will probably be some additional questions regarding salvage autos, and it may be difficult to obtain an auto insurance policy for your less than perfect ride.

Final Thoughts

Some key questions you will want to consider before keeping or buying a damaged vehicle will include the following: Why was the vehicle determined to be a total loss? Will you have the option to obtain comprehensive and collision coverage, or just liability? Will you be able to pay for repairs yourself if the vehicle is further damaged in a separate accident? Knowing the answers to these questions may help bring some clarity to your choice and help you make the right decision. 

If you’re able to, it would be in your best interest to obtain a copy of the accident report, as well as the repair shop estimate and documentation of all completed repair work. If you have additional questions about salvage vehicles, a Plymouth Rock representative would be happy to help you determine what option is best for you.

Plymouth Rock Assurance is a marketing name used by a group of separate companies that write and manage property and casualty insurance in multiple states. Insurance in Pennsylvania is underwritten by Palisades Insurance Company, Palisades Property and Casualty Insurance Company and High Point Preferred Insurance Company.

Call 855-993-4470, get your free quote online, or find an agent to find out more about salvage vehicles in PA or visit our contact us page if you need to call us with additional questions.