QuestionI know little about about buying cars, let alone 'rebuilt' and 'salvage' ones. I've read a few forums on the pros and cons of buying rebuilt and salvage vehicles. About 65% say to avoid these cars, but the remaining 35% say to go for it, depending on circumstance.
Here's the info on the car in question:
2003 Subaru Impreza TS Special Edition (special for chrome tip on muffler, spoiler, WRX front bumper)
Title: Rebuilt
Selling for $7500
81,477 kms (I'm in Canada)
Being sold by 2nd owner
Collision reported, giving it a 'salvage' title
Damage claim: almost $12k
Repair Estimate: $16.5k
Vehicle Valuation post-collision: $0
Point of impact: front center
If it were any other make I'd walk away from it but its a Subaru and I've found them to be good cars. I'm looking for a car to keep for a long time (I've had my current car for 10 years).
I test drove the car and it did have a very slight lean towards the right which could have been attributed to the highway road we were on. It is immaculately clean and there weren't any scratches or chips.
The owner explained the collision: it was parked and was totally side-swiped on the passenger side from bumper to bumper (which is *different than the point of impact* indicated on the collision report).
I asked if the accident affected the car's frame and he said 'no'. What was replaced was the bumpers, the windshield and the two car doors. I can't remember if any mention about the engine was made.
He said he drove it for a few months before it was repaired. That piece of info seems to check out as on the report it says it was given 'salvage' status in August 30 2011 and the damage claim was made in May 2012. Before the claim was made, on September 8 it looks like his insurance company showed a "continuation" of his coverage with a new policy.
Here are my questions:
Does $16.5k in repairs sounds more serious than a completely side-swiped parked car?
How is it possible for a car valued at $0 post-collision to be rebuilt and be allowed back on the road?
The base price to buy this car new is $23k and to purchase it used is $8k. Is $7500 a reasonable mark-down considering what this vehicle supposedly went through?
And last but not least: should this car be avoided like the plague?
Sorry for the long post, but asking about this car will help me better understand the art of buying used vehicles.
AnswerThank you for such a thorough question... Here are my thoughts:
I personally am not afraid of cars with salvage titles in general. However, there are some serious drawbacks you should be aware of before you buy one. The biggest drawback is in the fact that no bank will finance a vehicle with a branded title. The second drawback is it may be difficult to insure, and finally it will be extremely difficult to resell. That said, let's talk about this car.
When I booked out this vehicle, giving it options it probably doesn't even have and converting kilometers to miles, I got a wholesale book value of $7025. When I ran the Mannheim market report on this vehicle nationwide I got an MMR value of $5968 (the MMR value is the price that this vehicle sold for across the block at the auction within the last 90 days which is the truest determinant of its actual cash value) If you read the fine print of the blue book closely you will discover that these valuations are for vehicles that are front-line ready needing no reconditioning at all. In the case of this vehicle it isn't front-line ready because it has a branded title, and not only does it have a branded title for previous damage but your further investigation revealed that the accident caused $16,500 worth of damage to the vehicle ... That is a lot of damage, and I am willing to bet it was more significant than that because most claims adjusters stop adding things up once they reach the fair market value of the vehicle when they look at it. So the odds are the repair bill would've been closer to 20k +
I know why this car is attractive to you ...it's a cool looking car!You need to realize that this car has been driven hard with someone's boot up its ass for 81,000 km. Subarus have a great reputation for holding up under duress and heavy driving but vehicles like the WRX GT and STI's are like strapping a rocket to a skateboard and most of them end up getting wrecked as a result.
Now to your specific questions: first off the owner is lying to you; any car with this much damage has experienced trauma to its frame that can never be repaired and this car will never drive the same again ever ... The idea that this much damage was done by being sideswiped is ludicrous. I am willing to bet the entire car has been repainted and I can't for the life of me figure out why anybody would put the money and effort into putting this one back together.
You asked me:
1. Does $16.5k in repairs sounds more serious than a completely side-swiped parked car?
Yes for all the reasons stated above
2. How is it possible for a car valued at $0 post-collision to be rebuilt and be allowed back on the road?
A very good question especially considering Canada's safety requirements.
3. The base price to buy this car new is $23k and to purchase it used is $8k. Is $7500 a reasonable mark-down considering what this vehicle supposedly went through?
Absolutely not! Here is the rule of thumb on salvage or branded titles.... If they were put back together professionally and competently and are otherwise extremely clean they are worth 50% of the wholesale book value or MMR and not one dollar more. The most I would ever pay for this car under any circumstances is around 3000 bucks...MAX! You said it yourself and the book values I received prove it out that you can buy the same exact car with no issues, with no prior damage , and with a clean title for less than this person's asking you to pay for this car.
4. And last but not least: should this car be avoided like the plague?
Yes absolutely run.... Run-a-way as fast as you can and please take my advice on this one
my personal e-mail is road loans at Gmail please feel free to contact me with any follow-up questions you may have I will continue to answer until you are 100% satisfied with the answer and are able to fill out and return the survey you are sent from all experts giving me perfect tens in all categories and as many bonus points as possible ..., Good luck and don't buy that car !!
I have a feeling that you know what the right answer is here based on the way you asked the questions... You will be glad you passed on this one.... Trust me...
Roger
