The Law Dictionary

Your Free Online Legal Dictionary • Featuring Black’s Law Dictionary, 2nd Ed.

What Is a Salvage Title?

Salvage title car getting towed off the road

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What is a salvage title? You may encounter this term while looking for an inexpensive car or filing a claim after an auto accident. Some people choose to keep their vehicle after a total loss and repair it, which means applying for a salvage title. However, you should always proceed cautiously if you come across a salvage title.

What Does a Salvage Title Mean?

All states issue car titles. They show the make, model, year, color, vehicle identification number (VIN), and the owner’s name and address. If you financed the car, the financing lender’s name and address are on the title as the owner.

So, what is a salvage title? A salvage title indicates that an insurance company declared the vehicle a total loss after an accident, natural disaster, or theft. A total loss means repairs cost more than the car’s actual cash value. For example, if the insurance company values your car at $10,000 and estimated repairs are $12,000, it would consider your vehicle a total loss.;

Total loss standards vary between states. Some states lower the amount considered a total loss. For example, New York considers cars a total loss if the repairs exceed 75% of the car’s value. So, a car valued at $10,000 becomes a total loss if estimated repairs exceed $7,500.

What Are Common Causes of Salvage Titles?

Accidents figure prominently in the salvage title scene. However, there are other reasons why a car can end up with one. Here are a few:

  • Floods: All states require sellers to disclose flood damage to vehicles. Some states issue specific flood damage titles, while others simply use the label “salvage title.”
  • Theft: Stolen cars may disappear forever, but when found, they are literally shells of their former selves. Insurance companies then sell the car to a salvager, who will either part it out or rebuild it for resale. If they choose to rebuild, the salvage title remains.
  • Hail: Dealerships often salvage new vehicles beaten to death by hail. Like with floods, some states require specific hail damage titles.
  • Non-repairable: Also called a “junk” title, a non-repairable vehicle is a hopeless cause. Repairs can’t make it safe to run again, and the car lacks any resale value. Its only value is its parts. While this is not technically a salvage title (which leaves the door open for repairs), you will likely see this term when viewing cars in online ads.

Salvage titles also arise when owners of a totaled vehicle wish to repair or continue driving them. Owners often choose this option with low-value cars that have liability-only coverage. Also, people who believe they can fix their own cars often want them back as salvage titles. However, an immediate “buyer beware” situation arises if these individuals try to resell their repaired vehicles.

Should I Avoid a Salvage Title?

If you find yourself asking “what is a salvage title” as you consider a car purchase, you should proceed with caution. You may find a salvage project worth the time and effort if you’re a skilled auto mechanic or car restorer. After all, if the project doesn’t work out, you still have a parts car! A salvage car may also work out if you are not concerned about cosmetic flaws and the vehicle runs reliably enough. However, getting a formal road safety inspection is still a good idea as it could have unsafe conditions that aren’t as easy to observe.

Other than that, buying a salvage car is probably not a great option. You will likely pay people more to keep it running than if you purchased a newer car. You can also face these risks when buying a salvage car:

  • No financing options or high-interest options only
  • Likelihood of permanent damage, like bent frames or leaks
  • Difficulty confirming previous repairs -; and the car’s safety
  • Little to no trade-in value – better expect you’ll keep that car forever!
  • Difficult to insure

How Do I Know If a Car Has a Salvage Title?

The best way to check title status is to run a VIN check. You’ve likely heard of services like CARFAX and Auto Check, but there is also a free check through the National Insurance Crime Bureau (NICB.) That search reveals salvage titles and theft claims.

However, less reputable dealerships may engage in title washing when unfavorable information is removed from a title report. Fortunately, there are other signs of a salvage title, such as:

  • The seller is reluctant to show you the title.
  • The seller changes the subject if you ask if a vehicle has a salvage title or if you just bring up the topic.
  • Paint chips easily or paint colors are mismatched between panels.
  • You see a Certified Automotive Parts Association (CAPA) sticker on any part or component.
  • Wheel misalignment (suggests frame damage).
  • Car doors fail to open or close properly or seem misaligned.
  • It’s difficult to close or open the hood or trunk, or it misaligns with the panels.
  • Quirky electrical components, e.g., flicking warning lights, slow responding windows, etc.

An excellent general rule is never to buy a car that leaves you with misgivings. If a buying experience makes you uncomfortable, walk away. There may be nothing sketchy going on, but following your gut will prevent a regretful car purchase.

Can a Salvage Title Be Cleared?

No! If anyone claims they can clear a salvage title – run. Don’t buy from that individual. It’s more likely that their salvage title “clearing” was title washing.

A salvage title can become a rebuilt title. Titles for rebuilt vehicles have “rebuilt” branded on them. If you see this designation, someone repaired a salvage title car, and it passed a formal inspection. These are street legal and likely safe to drive.

What Is a Salvage Title? Possibly a Problem

Unfortunately, a salvage title vehicle usually amounts to a costly inconvenience. If you’re stuck with a salvage title after a car accident, there may be ways to recoup your losses. Consider getting a free review of your case today to learn more about your rights and options.

Disclaimer

This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

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