Often (daily, really) we’re asked about the terms “salvage” and “restoration” and asked to define:
- Which is better?
- What’s the difference?
- What about resale value?
And so on, so let’s address these three and a couple other queries as it relates to our Acquisition & Restoration business.
First a little background. At Wolfsburg, a number of our team members have worked the preowned auctions and salvage markets for Clients and our own personal vehicles for years.
This 1990 Mercedes 560 SEL was in terrific condition prior to being hit in Louisiana in the summer of 2013. We acquired it from an insurance auction on behalf of a Client, and began the restoration process. It is now an immaculate example, and regular at Mercedes club events.
In that time, two things have happened. First the used car market has heated up considerably. You can blame the 2008 economic bust for much of that as Americans slowed their new car purchases dramatically. Secondly, in response to that shift auction houses and salvage dealers became more sophisticated (including online browsing and bidding) and as competition for deals grew, the stigma of “salvage” wilted and dried up among car folks.
Keep in mind, banks and new car dealers still look down their noses at these cars, but consider their rationale and well, no surprises there.
Here are some simple answers to the above.
1. Restoration vs Salvage — A rebuilt or restored vehicle denotes an individual or firm like Wolfsburg expended a considerable effort to bring the vehicle back to a higher standard of daily-driver status, or show status for touring and collector events. This process requires sourcing correct-to-model parts and providing the necessary repairs. A salvage vehicle may or may not have had restoration-level service performed, and can be in any number of conditions, running or not. Salvage vehicle designations vary from state-to-state.
The state of Texas delineates the two as follows:
- A rebuilt vehicle, also known as “prior salvage,” means it was branded “salvage” but was rebuilt to road worthiness. A rebuilt vehicle must pass safety and anti-theft inspections, and other state-mandated standards in order to return to the road.
- A salvage motor vehicle is a motor vehicle (regardless of the model year) that:
- is damaged or missing a major component part to the extent that the cost of repair including parts and labor, exceeds the actual value of the motor vehicle immediately before the damage, or
- is damaged and comes into this state under an out-of-state salvage motor vehicle certificate of title or similar out-of-state ownership document that states on its face “accident damage,” “flood damage,” “inoperable,” “rebuildable,” “salvageable,” or similar notation
2. Which is Better? While the definitions can be confusing, semantics aside, if the vehicle is labeled “salvage,” it can be rebuilt or restored. That depends entirely on the desires of either an individual wanting that particular model or perceived savings. If a vehicle is deemed “rebuilt,” “rebuilt salvage” or “restored,” someone has already undertaken the time, effort and expense to make the vehicle safe, road-sound and (likely) visually appealing. Most of our Clients prefer acquiring a specific vehicle and then embarking on the restoration journey alongside Wolfsburg’s team. Another, and much simpler route is to utilize our services to acquire already restored, or one-to-two well-maintained vehicles that require a minimal amount of service to make them ready to show, or show off.
Not all restorations or salvage vehicles are alike. In fact, none of them are, so it pays to do your homework and work with a trusted automotive resource, like Wolfsburg.
3. What about resale value? When Wolfsburg restores a vehicle, it assist Clients in acquiring the appropriate title designation from the Client’s state of (primary) residence. Designations may include, “rebuilt,” rebuilt salvage,” “salvage” or “antique” in addition to standard automobile titles. While some buyers and insurance companies may automatically assume a lower market value due to these designations, this is not necessarily correct.
Consider a real estate transaction. What the state or county tax rolls show as a home or building’s value compared to what comparable sales or for-sale asking price often vary significantly. A restored collector’s car from the late 1960’s (70’s, 80’s 90’s) would not sell for the same price as one found rusting in a barn or junkyard.
Wolfsburg also assists Clients in assigning the proper value to the automobile when registering it. This may go above and beyond the “fair market value” most state DMV’s will assess, on into providing a detailed Restoration Report to assist insurance and state agencies in determining the value of your vehicle.
Obviously, there are details to be addressed. All the more reason to work alongside a trusted and professional firm like Wolfsburg. If you have additional questions, please utilize our Contact Us page and ask away.
