In California there are many vehicles on the road that are titled as salvaged vehicle. Once a vehicle is considered to be salvaged it will always remain a titled as salvaged. What this means is, the vehicle was involved in an accident or had previously been stolen and the damages to the vehicle exceeded the value. An example of this would be if a 10 year old vehicle was damaged in an accident and the estimate of repair was $4,000 to repair the vehicle. If the insurance company could replace this same vehicle for $3,000 then it would not be in their best interest to pay to have the vehicle repaired. These vehicles are often sent to auctions or to wrecking yards to be sold as parts cars. Many times they are purchased from the wrecking yard and then repaired with used parts. Once the vehicle is considered repaired it can undergo a brake and light and safety inspections then be registered to be driven again. The new title that is issued for the vehicle will be stamped as salvaged.Many times after these vehicles are repaired they are sold to the general public. These vehicles are sold for 30-50% less than vehicles with clean titles. The problems start when consumers try to get auto insurance on these salvaged vehicles. Many insurance companies will not insure a salvaged vehicle for physical damage protection. Other companies will not even insure salvaged vehicles for basic liability.Insurance companies that do not insure these vehicles for any type of coverage generally have concerns with the roadworthiness of the vehicle itself. If the repairs were not done correctly the existing damage could actually be the cause of an accident. This increases the exposure to the company and the likelihood that they would pay out for an accident. The main concern with insuring these vehicles for physical damage coverage is that the value is significantly less than clean title vehicles. If the insured were involved in a total loss of their vehicle it would be hard to determine the true fair market value of the vehicle itself. There are not enough of these vehicles on the road to make a determination based upon the year, make, model, and quality.Consumers that are in the market for a car purchase should get auto insurance quotes prior to purchasing a salvaged vehicle. The lack of company selection could cause the insured to pay significantly more for their insurance thus eliminating the savings on their salvaged vehicle purchase.
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