How to Value an Auto With Salvage Title

by Scott Krohn

Find the Current Market Value for Comparable Cars

Use the make, model and mileage of the salvage vehicle to compare against prices on comparable cars that are currently for sale. Due to the potential for extensive damage and uncertainty about the quality of repairs, the value of the vehicle will be substantially discounted from similar cars with clean histories. Kelley Blue Book and Autotrader usually have extensive inventories that can be used for the purpose of comparing prices. The average price of several comparable cars can be used as a benchmark to determine the value of the vehicle after estimated discounts are applied.

Get the Reason for the Salvage Designation

The salvage title tells you that a car has been totaled, but the degree of damage can vary a great deal. For example, a car with a bent frame from a collision likely suffered extensive damage, but 11 states assign salvage titles to cars that have been stolen, regardless of whether the vehicle was actually damaged. As a result, cars that have been stolen and stripped receive the same designation as cars that are recovered with no damage. Pinpointing exactly what damage occurred can benefit a buyer when a salvage car has been heavily discounted. It can also help an owner get a higher price when selling the car. You can find the reason for the salvage designation on the insurance company’s original damage estimate or by ordering a vehicle history report from Carfax or AutoCheck.

Have a Professional Appraisal

Values on salvage title vehicles may also vary widely due to uncertainty about the quality of the repairs. Arrange for a professional appraisal that includes the damage estimate as well as invoices for parts and repairs on the vehicle. This can tell you whether the rebuilding process was just enough to pass the state inspection or if it was intended to get the car back to its pre-salvage condition. For example, an extensive rebuild that used parts from the original equipment manufacturer and that was performed at a licensed repair shop will result in a car that's more valuable than one that was rebuilt in a backyard with generic parts from a scrap yard. The appraised value can be used as another benchmark to determine the value of the car.

Determine the Salvage Title Discount

The range of the discount applied by industry professionals such as dealers and insurance companies can vary widely. For example, according Kelley Blue Book, the usual discount for a salvage vehicle is 20 to 40 percent from comparable vehicles with clean titles. By applying the information you've gathered for a vehicle, you can come up with an estimate as to the amount of the discount and the approximate value of the car. For example, a high appraisal value, a stolen vehicle that was not damaged, or a car that has been rebuilt to its original condition with OEM parts could be discounted at 20 percent or less from comparable cars. A car with extensive damage and parts from a scrap yard would likely be discounted by 40 percent or more.

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About the Author

After working for 21 years as a licensed adviser specializing in corporate and private finance, Scott Krohn began his writing career in 2008 covering a variety of topics including business, personal finance, health, and IT. He graduated from Cal State University, Long Beach with Bachelor of Arts degree.