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car turned out to have salvage title? what to do?

R

randal

Golden Member
So kid bought a '02 civic a couple weeks back from a local auction. It had a limp-mode CEL on it, which turned out to be a VTEC issue, which stemmed from a head-swap done wrong.

This weekend we finished pulling the head and everything off (pretty cool father/son affair), and everything in the bay minus tranny/block/AC compressor is laid out neatly on a tarp (pics upon request ;-).

We got a call this morning that they dealer was doing the title transaction and found out that it has a salvage title. We were not disclosed this at the time of the purchase. They offered to refund the purchase price/taxes/etc ... but we're probably in ~650 for the head swap (between head+mill, water pump, oil pump, misc pieces, belts/gaskets, liquids/solvents/consumables, etc), excluding labor. We can return maybe $150 of it if we stop right now, leaving a pretty huge $500 gap (+12-14 hours of labor (I'm a newb)).

We are not interested in trying to clean the title -- totally not worth it. Put it back together and return it? Throw all the parts in the trunk and return it? Do we have a case to attempt to recover some of our costs?

Thoughts? :-/
 
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Why was it salvaged? If the reason is fairly innocuous see if you can just get them to refund you some money and just keep it.
 
I agree. If it was salvage due to theft I wouldn't worry much about it assuming you didn't pay too much for it.

And you can't legally "clean" a salvage title. It's the modern equivalent of the scarlet letter.
 
Salvage or reconstructed/rebuilt? A salvage title car isn't street legal in my state. Has to go through a process to prove it is safe to be put back on the road to get a rebuilt title.
 
As others have said, salvaged vs rebuilt is a huge difference, and the most important question.

Some states will let you easily reregister a salvaged car with a simple DMV inspection while others will not let you do anything at all about a salvaged title without getting a repair shop involved.


At this point I would demand both a refund and to keep the car. Tell them you have the $650 in it + 12 hours of labor, and if they want the car back they need to pay you the $650 + $600 labor. Small claims court would rule in your favor, if it got nasty.

How much did you pay for the car? For this kind of project on an 02 civic I wouldn't worry about it being theft salvage. My biggest concern is that it's a flood car. Does it smell funky? Any evidence of water lines inside the engine bay? Can you pull up the carpet?
 
That's actually 10 previous owners - we didn't buy it until 12/22/13. Which means the previous guy had it like 2 months. Methinks this thing has been a lemon/had problems for a long time.

Anybody know what the ramifications are for a dealer that sells a vehicle claiming a clean title when it is actually salvaged/rebuilt? Am interested so I can get some ammo in case they are unwilling to negotiate satisfactorily.
 
At first you said you bought it at auction? Did it come from auction or a dealer?? A dealer will have more of an obligation to resolve this.

Looking at the carfax....... I would insist on purchase price back and you keep the car, or purchase price + $600 if they want the car back.
 
Definitely dump the car back on them - if you lose the $600 plus labor that's a bummer, but it's better than keeping the car at the price you paid unless it was like 50% off KBB, the car is mint, and you plan to keep it for a decade.

At least fight for the parts money (which you can prove with parts receipts). If you have to suck it up and lose the $600 I think it's better than keeping the car.

This same thing happened to my brother at an auction. He and his wife had bought the car hoping to flip it for a profit. When I explained that salvage titles have a major impact on the resell value, it would never turn out to be a profit and would make it harder to sell in the long run. Luckily they didn't put any money into it yet. The dealer bought it back.

Regardless of the reason, salvage title cars will sell for a lot less money than clean title all else considered, plus you can't get collision/theft coverage (afaik, at least in my state) and add to that they'll be harder to sell. Then you have the possibility of a lemon which based on the engine issues I'd say this one's a nightmare.
 
fralexandr said:
aren't most things sold at auctions usually sold "as is"?
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Unequivocally, the answer is yes and no.

I say that because it completely depends upon the type of auction the vehicle was sold and the auction house's policies.

For instance, the impound yard type auctions are a total crap shoot. You aren't guaranteed a darned thing and the policies laid out explain that, with statements like "may have keys but they may not fit the car" or "no title issued only bill of sale" or "cannot run/turn on car". And that's because those vehicles are impounded from traffic stops, drug busts, etc., etc.

On the other hand, fixed dedicated auto auctions, from biggies like Manheim to smaller ones like Loveland in Johnstown, CO (picking CO because that's where the OP lives and it was one I stumbled upon googling CO auto sales policies), all have very distinct and similar policies concerning vehicles they auction.

First, they all act as an intermediary between the seller and buyer of the vehicle....the auction house isn't the seller. But the auction house does try to bear some responsibility for representing the vehicle as told to them per the buyer. And title issues are one the one area auction houses tend to pay close attention to.

Second, the auto auction houses almost all allow cars to be started and run, allow yard sales before the auction begins (you're dealing with the real seller at that point, most of which tend to be dealers ridding themselves of vehicles that they can't or won't sell on their lots). But almost without reservation, yard sales still have to go through the auction house for title transfer, and that's for the buyer's protection and so the auction house can get a cut--they're providing the selling space, after all.

Take Loveland Auto Auction, the "representative" auction house I used above. They have an entire page dedicated to title issues/arbitation.

http://www.lovelandautoauction.com/Company/RulesandRegulations.aspx

The one thing auction houses will repeatedly tell you is mentioned on that page:

The Buyer is cautioned not to sell or make repairs on the vehicle until title is received.
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I'd bet the auction house has a clause like this that'd allow the vehicle to be returned due to his title problem:

Any and all “Title Brands”,as known on sale day, which may affect a vehicle’s value must be announced. Some “Title Brands” include, but are not limited to: Lemon Law, Rental/For Hire, Reconstructed, Stolen vehicle and Insurance transfers.
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But if the auction house has this type of statement in its policies, which most probably do, the OP may be out the money spent:

Just because a vehicle is returned to the Auction does not mean the Buyer is out of the deal. The vehicle must be received and inspected by Auction management before the Buyer is out of the deal. Any vehicle returned must be in the same or better condition as when sold.
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And that statement is where the OP may lose every bit of his repair work, if not lose his ability to return the vehicle. Returning the vehicle in pieces may disqualify his ability to return said vehicle. The OP almost certainly will see nothing for the money spent trying to fix said vehicle.



Now, I don't know which auction house the OP bought through, but all that I've frequented over the decades have very similar policies.....so similar that it almost seems they've about standardized their selling policies across the country, kinda like a cut-and-paste of policies from one house to another. I'm thinking most copy what Manheim does since Manheim is one of the largest, if not the largest, national chain of auto auction houses. Manheim is a dealer-only type auction house and rarely opens their auctions to the pubic, btw. Fascinating auctions and the prices the vehicles sell for would make you drool sometimes, but it's dealers selling to dealers, which is why the prices are so low.


Anyway, good luck OP. You've got a case to return the vehicle. You just need to put it back the way you got it.
 
The fact that it has so many owners likely indicates it has a lot of problems that's why it has been handed off so often.
 
Right, so the purchase price was $2600 on a KBB of $3500. Colorado does have laws on the books about misrepresenting the status of a title, and it is a misdemeanor punishable by a fine of up to $1k. Any alleges of such are immediately sent to the association of automative dealers board which can yank their license and add more fines (both highly unlikely).

I haven't talked to the dealer yet today, although I appreciate that they were probably waiting on the title themselves and so did not know it was salvaged - perhaps they got bamboozled as well.

Importantly this is a public dealer-auction. The auction actually does own the vehicles and is a legit dealer, not a broker. I have no idea who the previous non-dealer was, and nor will I. It is ran this way so that they can collect the fees directly rather than having to get them out of the seller. This also allows them to effectively double-blind the seller and buyer and make large profits with little risk (if they know what they're doing).

Their website and paperwork make no statements about not working on the vehicle until the title arrives, but does have some language about requiring an affidavit of acceptance of salvage title cars, which was not supplied. I understand the forgoing reasoning, though: precisely for this situation.

So, it boils down to dealer who doesn't want to lose money vs savvy consumer who knows that they screwed the pooch. I probably will take a hit, but let's hope my negotiating skills prevail!
 
SpatiallyAware said:
$2600!?

Get your money back. Eat the $600 as a learning cost. Tow it back if needed.
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Mind if I ask why on the "!?" ? For what appeared to be a good running, 100k civic with a great interior and good body, it is a pretty good deal. Running properly itd go for 4k, maybe 4.2, so seemed like a decent investment, especially for a teenager who needs their first beater 🙂
 
$2600 would be fine for a clean title IMHO. I would definitely try to get some money back even if I you decide to keep the vehicle.
 
randal said:
Mind if I ask why on the "!?" ? For what appeared to be a good running, 100k civic with a great interior and good body, it is a pretty good deal. Running properly itd go for 4k, maybe 4.2, so seemed like a decent investment, especially for a teenager who needs their first beater 🙂
Click to expand...


$2600 is the most I would pay for a clean title, good carfax car from an auction.

The extra $1500 you pay for private party is for service history, ability to feel out the previous owner and use of the car.


I would've guessed you paid $1800-$2000 max.. Knowing it had a CEL, but otherwise an ok car.
 
tweakmonkey said:
Regardless of the reason, salvage title cars will sell for a lot less money than clean title all else considered, plus you can't get collision/theft coverage (afaik, at least in my state) and add to that they'll be harder to sell.
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not true on insurance. why couldn't you get coverage? car just has reduced value.

If I were into it for that and had the car apart and working on, i'd keep it. your kid can drive it into the ground and will still be able to sell it for a grand or so
 
Most insurance companies will not run collision ie full coverage on a salvage or rebuilt car. My guess is none, except for ultra exotics and specialty situations. How are they supposed to determine replacement value?
 
Zivic said:
not true on insurance. why couldn't you get coverage? car just has reduced value.

If I were into it for that and had the car apart and working on, i'd keep it. your kid can drive it into the ground and will still be able to sell it for a grand or so
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Reduced value and potentially reduced structural integrity. The salvage title doesn't necessarily say why it was salvaged, so insurers assume the worst. A weakened structure is more likely to fail in an accident and cause injuries to those inside.
 
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