Before you're turned off by the idea of a salvage title, it could be a way for you to get your hands on a car at a big discount. Salvage title vehicles aren't completely worthless, so if you do your research and take your time, you could save yourself big bucks.
What Does Salvage Title Mean?
If a car or truck is in an accident, and the cost of repairs is too high compared to the vehicle's value, the auto insurance company will declare it a total loss. The insurance company then takes possession of the vehicle, which may be sold to a repair facility for repair or rebuild. The vehicle gets a new title, called a salvage title.
Can You Register a Vehicle With a Salvage Title?
A salvage title is permanent so a salvage vehicle can never be issued a clear title. A vehicle with a salvage title cannot be registered until it has been rebuilt, inspected and deemed suitable for road use. Every salvage title has a primary brand and a secondary brand, included on the salvage title as part of the application process. A primary brand tells a potential buyer he is buying a salvage vehicle and gives specific reasons why the vehicle has a salvage title. The insurance company decides whether the primary brand is repairable or parts-only.
A repairable brand means the vehicle can be repaired and returned to its working condition. A parts-only brand means the vehicle is not roadworthy, and therefore cannot be registered. A secondary brand describes the type of damage or event that caused the insurance company to write off the vehicle, for example collision, fire, flood or theft.
To register a vehicle with a salvage title, follow the same registration process in your state for any other vehicle, providing all paperwork relating to the salvage title and the vehicle's history.
Read More: Vehicle Titles Explained
Is It Bad to Buy a Vehicle With a Salvage Title?
A vehicle with a salvage title isn't always worthless. While a big accident that damaged or destroyed the engine or other important moving parts can affect the reliability of the vehicle, an accident that caused only cosmetic damage will leave the engine and other critical parts in their pre-damage condition.
Before buying a vehicle with a salvage title, consider what parts of the vehicle were damaged in order for it to be labeled a total loss. Decide whether those parts are critical to the car's performance and safety, whether the repair costs are within your budget and what is the risk of future repairs. It's not always possible to know exactly what happened to a vehicle with a salvage title, so there's always some element of risk. Also, if you decide to sell a vehicle with a salvage title in the future, it may be hard to determine its value and to convince a prospective buyer that it's worth the money.
Before you buy a car with a salvage title, ask a mechanic for their professional opinion and ask the seller for a vehicle history report. If he doesn't have it, you can get a full vehicle history report by giving a federally approved National Motor Vehicle Title Information System data provider the vehicle's VIN, or vehicle identification number.
A salvage title is issued to a vehicle so badly damaged that the cost of repairing it is much higher than its value. The insurance company writes it off and takes possession of it.
- New Hampshire Department of Safety Division of Motor Vehicles: Salvage & Rebuilt Vehicles
- Colorado Department of Revenue Division of Motor Vehicles: Salvage Vehicles
- New Jersey Motor Vehicle Commission: Salvage Vehicles
- Mass.gov: Total Loss and Salvage Vehicles
- National Motor Vehicle Title Information System
Claire is a qualified lawyer and specialized in family law before becoming a full-time writer. She has written for many digital publications, including The Washington Post, Forbes, Vice and HealthCentral.