Q. Dear Tom and Ray:
I've been wanting to buy a vehicle for quite some time now and have finally settled on the Subaru Impreza Outback. I have been looking for great deals on '97s and '98s in the paper and online. I came across a 1998 with less than 8,000 miles on it for only $12,500 and thought, "Hmm . . . what's the catch?" Turns out it has a salvaged title. The new owner--not the guy who "totaled" the car--told me that the hood and windshield were replaced and all four doors were repaired. He also told me that the drivetrain was not damaged. Could such body damage be enough to reduce the price by this much? And is there any way I can find out more about this particular car--like by having an insurance agent look up the VIN? And what do you think of the idea of buying a salvaged car?
A. RAY: I'd proceed very cautiously, Nichole, if at all. Salvage laws vary from state to state, so you have to check with your department of motor vehicles (hope you have a phone with automatic redial!).
TOM: In most states, if an insurance company determines that a car has sustained damage that exceeds a certain percentage of the car's value (usually 50 percent to 70 percent), the insurance company "salvages" the car, taking possession of it and making some sort of monetary settlement with the owner.
RAY: That car is then branded with a "salvage" or "damaged vehicle" title, identifying it as having been severely damaged and not roadworthy.
TOM: If the buyer of a salvaged vehicle then fixes up the car, the buyer can get it inspected by the state. The state will want to see the original insurance assessment of the car and the receipts of all the work done and the parts replaced. If the state is convinced that the salvaged car has been made roadworthy and safe, and that all necessary repairs have actually been done, the state will issue a "reconstructed" or "rebuilt" title.
RAY: So since the car you're looking at has a "salvaged" title, it has not been reconstructed yet--or, at least, not to the satisfaction of anybody other than the seller.
TOM: If you were to find a car with a reconstructed title, you would be able to go to your state's department of motor vehicles and request the paperwork on the car's reconstruction inspection. That'll tell you what was damaged originally and exactly what work was done.
RAY: But in your case, you have no choice but to take the seller's word for what was damaged and repaired.
TOM: So I'd be very wary of this car. While body damage can be very expensive and can result in a substantial reduction in the value of a new car, you really don't know that the damage was limited to the body. Even if the drivetrain is fine, the frame and suspension are likely to have been damaged, and the car may never steer straight or may eat through sets of tires every six months.
RAY: So I'd keep looking, Nichole. This deal sounded a little too good to be true because it probably is.
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