wrb057 wrote:For a car to be in salvage there must be something really wrong with the car becasue a car does not go out to salvage just for minor damage. Usually insurance only sells a car to a salvage yard after repairs are greater than 50 percent of the actual cash value of the car.
I'll expand on this a bit. Different insurance companies have different thresholds for total losses, but may also calculate the total loss numbers a little differently when comparing to a total loss. 50% would be a very low threshold, but they may not factor in non-repair costs. Some use thresholds as high as 75-80% but try and factor in as many costs as possible.
In the end some of it is a judgement call. A buyer of a salvage car might get lucky in that the speculated hidden damages may have been much more than the actual. This is pretty rare though as more and more insurance companies are migrating towards a more accurate methodology in determining total losses (in particular with borderline totals). Basically, if it might be questionable, they'll pay for a tear down so they can inspect as much of the hidden damages as possible.
Ultimately, a total loss decision is an economical one. When the total cost to the insurance company is more than the total cost of settling a total loss, they will total it. They may consider rental expenses as well(especially if the insured has rental coverage).
How this relates to the purchase of a total loss is that when a total loss is settled, the insurance company recovers part of the total loss by selling the salvage (either to a salvage auction or to back to the owner). In either case, if it is repaired, theoretically, in order to make any money off it, they would have to cheap out on the repairs. Especially since vehicles with salvage titles generally sell for less than a comparable non-salvaged vehicle. The exception might be if the seller gets great deals on proper repairs, but even then, I would expect these types are in it for the money and would simply do minimal (read: shotty) repairs and leverage any discounts to maximize their profits.
Basically, buying a restored salvage vehicle is a bad idea. Personally, if I were to buy one, I'd be considering what was damaged and what my plans were with the car. And it would likely be one that wasn't restored so I could be in control of the repairs.