CarFax History Report and Salvaged or Total Loss

Salvaged and Total Loss Vehicles

CarFax Vehicle History Report

A CarFax history report is important  when purchasing a vehicle.  Like every piece of information which is available to you, how you utilize that information is more important.  CarFax only provides you the information it has been provided.   It cannot provide information it does not have any record of.  To the extent that it would provide you with a complete history report, and using that report as the only criteria when purchasing a vehicle is a bit short sighted.

 Major flaw in CarFax:

Accidents which have not been reported to an insurance company or an accident report   prepared by a law enforcement agency will never appear on the vehicle history report.  You may ask yourself how common  is the case?  It is more common than you may think.  Vehicles which are self insured, rental car, lease vehicles, people with only liability insurance, never reports to CarFax.  These vehicles are never repaired correctly, but at the same time are moved from state to state and sold as clean titled and car-fax vehicles.

Protect yourself:

A mechanical and body integrity inspection is more important that a piece of paper.  Start off with a simple wheel alignment.  Have the vehicle inspected for fit and function, meaning do all the panels fit correctly, does the body have any appearance of repair.  A trained professional can tell rather quickly if the vehicle has been repaired.  When you look at a vehicle, if you can tell it has been repaired, then the repair is not a quality repair.

So the vehicle has been marked as a “Total  Loss”, does it mean that the vehicle is not repairable.  If the vehicle was not deemed repairable, the title would be marked as “Junk” or “Parts Only”.  Meaning the vehicle will have to be dismantled and used for parts.

Salvaged or Total Loss

Jaguar

The damages to this vehicle had deemed it to be a total loss which the owner retained

Salvaged or total loss, means that the insurance company has found that it was not cost effective to repair the vehicle.  In the industry, how they have been determining what is repairable and what is a total loss by follows this rule.

Current value of the vehicle, not necessarily the fair market value or what you think it is worth (10,000) minus what the vehicle will get at auction in it current state (3000).  The real kicker is if you have existing body or mechanical damages which have not been repaired, you can be in for a serious surprise.  The place a value for very repair which has not been completed.  In the is example, you were hit by another driver and the damage is the left headlight, left fender and door.  The cost to repair is $3500.00.  In most instances, the accident would be reported, and you would assume that it would be repaired correctly.  On the surface it may be true, but you should be more concerned who repaired the vehicle and whether the repair was done by a license repaired shop.  In this day and age, a majority of owners look at an insurance payment as a payday.  They collect the funds and try to repair the vehicle on a budget to save their deductible or just get the vehicle back on the road with money in their pocket.  Repairs of this type is the most dangerous to you and the occupant of the vehicle.  In this example, if the door was required to be replaced because of structural damages, but the owner found someone to, or repaired the door themselves.  That door will not function in the manner it was originally designed to function in an impact.  It can mean the difference between walking away from an accident which involves a door impact, or being seriously or fatally injured.  Therefore, the quality of the repair is more important than no history about the repair.  What would you think about someone who say the following to you:  I just bought this car for my sixteen year old daughter,  I want you to fix the brakes, but I want to spend the lease amount of money on the repairs.  The same can be said about the car being purchased.

Here Is The Kicker

In this example, the difference between the vehicle being a totaled and branded being a salvaged vehicle or being repaired is the following:

1) Did the airbags deploy during the accident.  Most insurance companies do not want to repair a vehicle if the SRS system has been compromised in anyway, because they feel it is too expensive to repair this system.  A majority of the backyard shops do not replace the required components during the repair process.  Sometimes some individuals will disable the system, and not replace components, or do a partial repair and the system will have an SRS light on.  The cost to correct this type of problem can get expensive.

2) Does the vehicle have other body damage on it. Meaning, you did not repair the hail damage on the roof and deck lid, or you have a scratch along the right side of the vehicle.

Using a 75% threshold we come up with a total loss window.  $10,000*.75=$7,500. minus salvage of $3500 equals $4,000.  So in this case an insurance company will total the car is they feel the damages exceed $4000. So if the damage to the right side was $1500, or the cost to replace airbags were $1500, this vehicle would be deemed a “total loss”.

Now you as the owner have two choices: retain the vehicle, and be paid the value of the vehicle (10,000)  minus the salvage value (3,500) minus the additional cost of the repairs (1500).  So you would be paid $5000 and you get to keep the car, or be paid $8,500 and they take the car away.   If they take the car away, it is then re-sold as salvaged vehicle which is usually repair and re-sold.  These cars are moved around the country and around the world by dealers and non licensed dealers and are repaired as cheaply as possibly.  They the cars around to wash the titles in order to hide the salvage history.

If this salvage car is repaired by the owner, it is a candidate to be sold privately or repaired as cheaply as possible.  I believe these are the type of cars which are dangerous to purchase.  If it looks like it has been repaired, it is a poor attempt at repairs.   Craig’s list is where you will find a majority of vehicle.  Be careful if the person you are purchasing the vehicle from in not titled owner of the vehicle.  Title jumping is illegal in Minnesota, and you may have no recourse against the seller if his name or his business name is not on the title.  Anyone selling more than 5 vehicles a year, needs a dealer license.  Dealers must carry a bond to keep their license.

Remember, most state’s salvage inspections are to check for stolen parts, not to inspect the vehicle for safety.

In conclusion:

The CarFax vehicle history report is important, because it as part of the entire  buying process, and don’t use it as the only measure to evaluate the quality of a vehicle.  Ask yourself, are you purchasing a vehicle for re-salability or are you looking for a quality and dependability which will service you safely for a considerable amount of time?  If a vehicle  was truly deemed as not repairable, the title would be branded as being “Junk” or “Parts Only”.

If the insurance company marks the title as being either of those two classification, the value they get at the auction is reduced by about 2/3 of what they would normally get.