Diminished value on a salvage title

A salvage vehicle means a vehicle declared a total loss due to a wreck or theft. In Texas it is possible to buy and drive a vehicle with a salvage or rebuilt title. It requires inspection by the Department of Motor Vehicles and a certificate issued on the basis of the inspection. Many people are leery of buying a vehicle with a salvage title but there is definitely a market for them. Many buyers in the salvage market are looking for older vehicles or specialty vehicles to work on as a restoration.

Some are looking for vehicles to gut and upgrade for racing. Many are simply looking for a good deal on a vehicle that needs a little work. It is possible to pick up a vehicle with a salvage title at a considerable discount. It creates an opportunity to pick up a good deal if one can have the vehicle repaired at a good price.

However, salvage titles are widely regarded as less valuable on the market. Insurance companies generally consider these vehicles to have extremely low market value. That can be a substantial problem if you are in an auto accident and attempt to make a diminished value claim on your vehicle.

Salvage titles in Texas

Because insurance companies generally treat a salvage titled vehicle as having little or no market value, you will find it extremely difficult in most cases to persuade a claims adjuster that there is any diminished value on the vehicle. Practically speaking, we can agree that a vehicle in working repair has some value even if it has a salvage title.

However, in the business of insurance and the practice of law, there is a threshold where the dollar amount of a diminished value claim is so low that the insurer knows it’s not worth your time or money to pursue the claim in court and even if you did, your return would be next to nothing. That is what they believe about your salvaged titled vehicle and any diminished value claim you might have on that vehicle but it isn’t necessarily always true.

A quality rebuild on a restored classic or antique car may not be worth as much with a salvage title; but it’s hard to believe there isn’t a market out there for that kind of vehicle. Finding diminished value, and perhaps a lot of it, might not be very difficult. A fifteen year old Accord with a salvage title and 250,000 miles likely commands little on the used car market. There is little diminished value. You need to know the market value to determine the merits of a diminished value claim.

Path for resolving claims in Texas

Like any other diminished value claim, if you cannot settle through the insurance company you must sue the other driver. If there is minimal diminished value then it likely makes little sense to pay a car accident attorney to pursue it. Filing in small claims court and hauling the other driver into court may present the most cost effective option. However, before filing suit you should consider the probability that you can prove diminished value on the vehicle; and whether the diminished value is worth the time and money.

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