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what is a salvage title car

What is a Salvage Title

If you come across a used car with a salvage title, you may be wondering – what exactly does that mean?

As someone who has bought and sold many used cars, I can explain everything you need to know about salvage titles.

The short answer: A salvage title indicates the car was previously deemed a total loss by an insurance company after being damaged. The vehicle likely required extensive repairs to become operable again.

Related Article To Read: Banks that finance salvage title cars.

While salvage title cars can save you money upfront, they come with risks like safety concerns, limited insurance, and low resale value.

This comprehensive guide will cover how salvage titles work, whether they make good purchases, and tips for buying them safely.

Key Takeaways

  • A salvage title indicates a vehicle deemed a total loss by an insurer after major damage.
  • Once repaired and inspected, a salvage title car may get a rebuilt title to become operable again.
  • Buyers must weigh major pros like cost against cons such as safety risks.
  • State salvage title laws differ significantly, so research regulations.
  • For most buyers, a higher mileage clean title car is the smarter choice.

Related Article: Can you finance a salvage title car?

What is a Salvage Title?

A salvage title indicates that a vehicle was previously deemed a total loss by an insurance company after sustaining major damage from an incident like a collision, flood, or vandalism.

Once the insurer declares the car a total loss based on damage costs exceeding a percentage of the vehicle’s value, either the owner or insurer applies for the salvage branding on the title.

This means the salvage vehicle can no longer be legally driven without extensive repairs and inspections to earn a rebuilt title.

Salvage vs. Rebuilt Title

Overview of Salvage vs. Rebuilt Titles

Title TypeDescriptionLegal Status
Salvage TitleIssued when a vehicle is declared a total loss by an insurance company due to significant damage.Not drivable or registrable until repaired and inspected.
Rebuilt TitleIssued for a salvage title vehicle after it has been repaired to a roadworthy condition and passed a state inspection.Legal to drive and can be registered.

There is an important distinction between a salvage title and rebuilt title:

  • Salvage title – Damaged car deemed a total loss. Not drivable legally.
  • Rebuilt title – This is a salvage title car that’s been repaired, inspected, and certified as roadworthy again.

So a rebuilt title car has gone through the process of rebuilding after being declared salvage, while a salvage title indicates the car still needs those repairs.

How Salvage Titles Work

Here is the general process for how a car goes from a clean title to a salvage title[1]:

  • The car is badly damaged in an accident, flood, etc.
  • The insurance company deems it a total loss based on damage costs vs. value.
  • The insurer or owner applies for a salvage title with the DMV.
  • Once repaired, the salvage car passes state inspections.
  • After inspections, the DMV issues a rebuilt title to make it legal to drive again.

The exact salvage title process varies by state. But it ensures vehicles are safe after major damage before returning to the road.

Related article: Do stolen cars get a salvage title?

Should You Buy a Salvage Title Car?

Salvage title vehicles come with some big tradeoffs to weigh.

Potential advantages:

  • Cost savings of 20-40% compared to normal used cars
  • More selection, especially with rare or old models
  • Minor damage in some cases

Potential disadvantages:

  • Safety risks from poor repairs
  • Limited insurance coverage
  • Loss of resale value
  • No remaining manufacturer warranty
  • Issues may emerge later

For most buyers, the clean title route is smarter. But for some specific situations, a salvage vehicle can make sense:

  • You have mechanical skills to inspect repairs
  • The damage history is fully known
  • The car is rarely driven
  • You must pay cash due to no financing

Key Considerations for Purchasing Salvage Title Cars

Cost SavingsCars can be 20-40% cheaper than similar models with clean titles.You may face unexpected repair costs, and resale value will be lower.
SelectionWider range of models, including rare or older vehicles.Limited history, making it harder to verify the extent of damage or quality of repairs.
InsuranceAlthough challenging, it’s possible to find companies that offer limited coverage.Many insurers will not offer full coverage, leading to potential out-of-pocket expenses in case of accidents.
SafetyOpportunity to customize or upgrade during repair.Risk of substandard repairs that can compromise the vehicle’s integrity and safety.

Advice for Salvage Title Car Owners

If you own a salvage title vehicle, tips include:

  • Complete repairs and get state inspections for a rebuilt title[2]
  • Shop insurers to find one that will offer coverage
  • Monitor the car for emerging damage-related issues
  • Disclose salvage history when reselling

Environmental Impact

Salvaged vehicles can cause pollution if dismantled improperly, through leakage of hazardous fluids and heavy metals[3]. Using qualified dismantlers mitigates environmental impact by properly removing and disposing of harmful materials.

Ethical Concerns

There are some ethical issues to consider with salvage title cars[4]:

  • Safety risks if repairs were substandard
  • Potential for fraud if damage is hidden
  • Environmental harm from illicit dismantling
  • Unfair exporting of poorly repaired cars

State Salvage Title Regulations

It’s critical to research regulations in your state[1]. Key differences include:

  • Damage thresholds to trigger a salvage title
  • Total loss definitions
  • Branding rules for theft recoveries
  • Inspection requirements for rebuilt titles

For example, Kansas sets a 70% damage threshold, while New York uses 80%[1]. The salvage and rebuilt title process can vary widely.

Salvage Title Regulations Table by State:

StateDamage Threshold for Salvage TitleAdditional Notes on Rebuilt/Salvage Titles
Alabama75%Rebuilt title requires repairs, inspection, and documentation
AlaskaBased on damage percentages
ArizonaSalvage titles issued for stolen/recovered vehicles; inspection and documentation required for rebuilt title
CaliforniaSet by insurersStringent rebuilt title requirements
ColoradoSalvage titles not issued for collector vehicles; inspection required for rebuilt title
DelawareBranded titles indicate if the vehicle is rebuildable
FloridaInsurer declarationInsurer declares total loss; specific salvage designations based on damage
GeorgiaTotal loss or >75% damageRebuilder’s license required for rebuilt title
IllinoisSalvage titles issued for stolen/recovered vehicles; inspection required for rebuilt title
KentuckyDamaged, rebuilt, or water-damaged brands
MarylandSalvage titles issued for stolen/recovered vehicles
Massachusetts70%Stringent rebuilt title inspection
Michigan75-90% gets salvage title, 91%+ gets scrap title
MinnesotaSalvage titles issued for stolen/recovered vehicles; inspection required for rebuilt title
MissouriInsurer declares total loss regardless of damage
NevadaSpecific designations for rebuildable and salvage
New Hampshire70%
New JerseySalvage titles issued for stolen/recovered vehicles; stringent rebuilt title requirements
New MexicoSalvage titles issued for stolen/recovered vehicles
New YorkSalvage titles for stolen/recovered vehiclesSalvage titles issued for stolen/recovered vehicles; stringent rebuilt title requirements
North Carolina75%
North Dakota75%
OhioSalvage titles issued for abandoned vehicles
OklahomaSalvage titles issued for stolen/recovered vehicles
Oregon70%Salvage titles issued for stolen/recovered vehicles
PennsylvaniaSet by insurerStringent rebuilt title inspection
Rhode Island70%
South Carolina75%
South DakotaNo salvage title laws
TennesseeSpecific rebuilt title requirements
Vermont80%Stringent rebuilt title inspection
West Virginia75%
Wisconsin70%Stringent rebuilt title inspection

My conclusion

In summary, salvage title and rebuilt title cars can seem appealing due to potential cost savings, but most buyers are better off with a high mileage used car that has a clean title according to the Kelley Blue Book value.

While they may work for certain buyers under specific circumstances, salvage vehicles come with increased safety, insurance, maintenance, and resale value risks to carefully weigh.

Performing thorough research and understanding your state’s salvage title regulations is crucial before pursuing these unique used car purchases.

For most people, the smart choice is to avoid the potential headaches and buy a used car with no title problems.

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Steve Momot - Author

Steve Momot - Author

Steve, a seasoned expert in the automotive industry, formerly held a car dealer license in Florida. With extensive experience spanning across car trading and mechanical work, he founded Autohitch. His mission? To guide both buyers and sellers through the intricate maze of car purchasing, ensuring a seamless and informed experience. Outside of the automotive world, Steve has a passion for fishing and capturing the beauty of nature through photography.


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