How to Convert a Salvage Title in Louisiana

A salvage title is a car that has damages totaling over 75 percent of its fair market value, according to the state of Louisiana. A salvage title is illegal to drive and will not have a warranty, insurance or registration. However, if an owner converts a salvage title car to one with a reconstructed vehicle title, they can get what they need to drive it legally. If someone decides to keep a salvage title, they have 30 days from the insurance claim settlement to apply for a rebuilt title.

A salvage title car is a vehicle that an insurance company considers a total loss when paying out a damage claim. Typically, the vehicle suffers damage in a significant accident, and the cost of repairing it is more than it's worth. Under the circumstances, if an insurance company declares the car a total loss, it will usually take ownership of it.

When the insurance company recoups its costs on the vehicle, it may sell it to a mechanic to rebuild or repair it. At that point, they declare the car salvage title, which lets future buyers know of its previous damage.

The Louisiana Office of Motor Vehicles (OMV, sometimes called the DMV in other states) considers a vehicle salvaged if its damages cost 75 percent or more of its fair market value. When an insurer declares a car to be a total loss, the vehicle owner has just 30 days from the claim settlement to apply for a salvaged title if they decide to keep it.

Laws detailing what causes a car to become a salvage title car vary from state to state. Depending on the location, they are:

• Flood damage: Some states specifically use the term flood damage; Louisiana uses the term water damage.

• Hail damage: Vehicles damaged by hail can also get a salvage title in the state of Louisiana.

• Theft recovery: An insurance company will pay off a car when it goes missing due to theft after a certain amount of time. If found after that period, they can resell it to a salvager.

• Vandalism: If a car sustains enough damage by vandalism, it may receive a salvage title.

• Non-repairable: A car with severe damage and no resale value can have a non-repairable designation. In these instances, the vehicle is sold to a scrap yard or is otherwise destroyed.

Salvage title laws may also apply to taxis or law enforcement vehicles that are under warranty or remanufactured for resale. No matter the cause, damages to salvage title can be either significant or cosmetic.

Individuals may want to own a salvage title car for a variety of reasons. Since the vehicles aren't roadworthy, they can be significantly cheaper. In fact, they can cost 20 to 40 percent less than a car with a clean title. Not all salvaged vehicles are wrecks – some may only have cosmetic damage. Older cars with low market value may also be salvage titles and deemed a total loss, although they may not cost that much to repair.

Someone who finds a salvage title can use its parts for another car. Doing this will save them from having to purchase expensive or otherwise hard-to-find parts. Furthermore, they can strip the car and sell the parts they don't need.

A person who buys a salvage title may get in over their head if they don't know what to expect. They may overlook critical damage to the vehicle. For example, if the damage occurred during a collision, they may not see the full extent right away and could end up with a car they believe is an easy repair, but actually costs more to fix than they initially thought. When a vehicle has a salvage title, it is often because the repairs are costly.

For owners of a salvage title car that later becomes a reconstructed title, getting insurance can be difficult. If an owner can find a company that does offer it, they may not allow full coverage. The owner may get stuck with an insurance plan that is liability only and won't cover damage to the vehicle if a collision occurs.

After an insurance company declares a vehicle a salvage title, the owner must accept a partial or full settlement. Insurance companies and individual policy settlements vary from car to car. However, an owner should expect either: a full settlement where the insurance company takes total responsibility for the car and pays the owner damages, or a partial settlement, where the owner keeps the salvage title car and gets partial damages provided by their insurance policy.

If an owner gets a partial settlement, they can junk the car and sell it to an entity that deals with dismantling, recycling or scrapping cars. They can also repair the car and apply for a rebuilt title with the OMV. Those who choose to fix the vehicle can keep it for themselves or sell it to someone else. Owners who have questions regarding their options can contact their insurance company or local OMV office.

Motorists applying for a salvage title in Louisiana must submit their application to the OMV with additional documents if their insurance company or agent cannot get the certificate of title from them or the lien holder within the 30-day period from the settlement date. In this instance, they must submit certain documents to the OMV:

• Complete vehicle application using form DPSMV 1799.
• Notarized affidavit stating that the insurance company has made two attempts to get the title from the owner or lien holder.
• Copies of the notices sent to the owner or lien holder.
• Federal odometer statement, if applicable.
• Copy of the insurance company's proof of loss statement.
• Lien release, if applicable.
• Payment of the applicable fees to the OMV.

Those who transfer ownership of their salvage title car must disclose the transfer of that title to the buyer of the vehicle in writing. If they do not do this, the vehicle recipient can rescind the sale and recover the price of the car, along with additional fees and taxes they paid in the transaction.

In Louisiana, salvage titles are not legal to drive and don't have warranties because an owner can't register or insure them and can't acquire tags for them. Drivers who want to own a salvaged car will have to obtain a reconstructed title, which allows them to get the documents they'll need to legally drive.

Getting a reconstructed title in Louisiana is easy to do. Once the car's owner provides the OMV with the necessary documents, they get a new title stamped as rebuilt salvage, allowing them to register the car and get new tags. To do this, the owner must:

• Give the OMV an in- or out-of-state salvage title with an endorsement.
• Provide a notarized bill of sale to show they own the vehicle.
• Get a physical inspection of the vehicle and provide an affidavit showing proof of the inspection.
• Provide the OMV with a completed Application for a Salvage-Reconstructed Motor Vehicle with information on the owner, the vehicle and its repairs.
• Complete a title application.
• Pay to the OMV any associated fees.

The Louisiana OMV does not require a salvage title vehicle to pass an inspection. However, after its restoration has taken place, the owner may want to re-title the car. In doing so, they will need to submit an Affidavit of Physical Inspection.

A Peace Officer Standards and Training (POST) officer who holds a certification to inspect cars by the Louisiana Department of Public Safety and Corrections, Office of State Police, will conduct the physical inspection of a salvage title. Salvage vehicles may also undergo the examination of their repaired or replaced parts.

The Louisiana salvage title and reconstruction title application process requires owners to pay fees to the OMV for the title. This includes a mandatory salvage title value fee and a local service fee. The salvage title is $68.50 in Louisiana. For owners recording a Uniform Commercial Code (UCC-1) lien when applying, the cost is $15. Other lien documents are $10.

These fees vary by location so owners should contact their local OMV office for more information. Applicants can submit these documents and fees in person or send them by mail to the Office of Motor Vehicles, P.O. Box 64886, Baton Rouge, LA, 70896.

A salvage title car will not have insurance coverage until it has a rebuilt title. However, once an owner has the new title and registration, they can obtain insurance coverage. The most basic policy is a liability policy, necessary for a car to be legally driven in Louisiana.

Owners can comparison shop with different insurance companies and may even find a policy that offers comprehensive or universal insurance. However, as long as they have liability insurance, they can drive the car in the state.

Before buying a salvage title, a potential owner or rebuilder should conduct research by:

• Getting a vehicle history report. If there was an accident, the report will indicate its severity, particularly if towing or airbag deployment occurred.

• Finding the car's vehicle identification number (VIN) online. This may bring up pictures before repairs and will help an inspector to focus on specific areas.

• Taking the car to a reputable mechanic or body shop for a vehicle inspection.

• Test-driving the car, including checking all buttons and knobs to make sure everything works.

• Getting a car insurance policy quote before committing to the car.

• Researching online reviews, if buying from a local dealer.

A person interested in a salvage car can buy it locally or from state auctions or online car auctions that allow consumers to access sales that are happening in states across the county. They may also help a buyer arrange transportation for their new salvage title vehicle.