What Is the Difference Between Clear Titles & Salvage Titles?

••• Jupiterimages/Pixland/Getty Images

Automobiles manufactured in the United States have a legal title. When a car dealer sells a vehicle for the first time, the new owner gets the certificate of title -- proof of ownership. Anytime the vehicle is resold, this constitutes a change in ownership, so the new owners must have the title transferred into their name. The title contains all the pertinent information about the vehicle, including the vehicle identification number, or VIN; weight; and mileage.

Clear Titles

Having a clear title to a vehicle means that the title has no liens or other loans against it -- the title is clean, ready to be put into the new owner's name. Most states have regulations regarding titles and some of them have made it illegal to sell a vehicle that does not have a clear title. This includes private sellers as well as dealers.

Salvage Titles

Vehicles are branded "salvage" if they've been involved in a crash and have sustained considerable damage -- almost rendering them a total loss. If a vehicle involved in an accident absolutely cannot be repaired, then the owner notifies his state's governmental motor vehicle regulatory agency that it is a salvage vehicle. Owners take most of these vehicles to metal recycling centers, where the vehicles are sold for scrap metal.

Rebuilding Salvage Title Vehicles

You can purchase a vehicle that has a salvage title and rebuild it. A vehicle may have damaged doors, fenders, hoods or windows, which can all be replaced. Rear-ended vehicles are considered a total loss if the trunk is crushed in and it is not accessible. If the actual frame of the vehicle is not bent, then it can be rebuilt; the Department of Motor Vehicles licensing office will issue a new title after it has been officially inspected.

Miscellaneous Title Regulations

"Jumping title" means that someone purchases a used vehicle and resells it before having the title put in her name. Technically, this means that the vehicle was sold without a clear title. If the previous owner put the new owner's name on the title as the buyer, then the title has to change twice before the new owner has legal title. Attempting to mark out or erase anything on the title will in most states void the title.

References

Resources

About the Author

Gracie Sprouse has been writing professionally since 1976. Her areas of expertise are in antiques, crafts, real estate, income taxes and small businesses. Her education consists of an Associate of Applied Science with a business and accounting major from Piedmont Virginia Community College.

Photo Credits

  • Jupiterimages/Pixland/Getty Images