A salvage title is a car title that a motor vehicle agency issues to a car that has been declared a total loss by an insurance company. When a car is damaged to such extremes that it is not economically feasible for the owner to repair it, it’s considered totaled and can be sold by the insurance company to a salvage to repair or restore it.
Why Do Cars Receive Salvage Titles?
Cars receive salvage titles for a variety of reasons, but being totaled in a collision is probably the most common. In this case, the insurance company declares the vehicle a total loss, and the motor vehicle agency issues the car a salvage certificate to indicate that it cannot be sold, registered, or even driven. The insurance company then typically sells the vehicle to a facility to be repaired or sold for parts. If it’s repaired, the motor vehicle agency issues a branded title letting potential buyers know it’s a salvaged vehicle.
Depending on the state, cars may also receive salvage titles if they have been recovered after being stolen. If a car has been stolen and remains missing for some time, the insurance company pays the owner for the vehicle. If the vehicle turns up later, the insurance company can sell it to a salvager. After the vehicle is restored or repaired, certain states will then issue a salvage title.
Vandalism is another possible reason for issuing a salvage title to a vehicle. Since no state includes vandalism on a title, they issue a salvage title instead if the damage was extreme enough to warrant one.
Natural damages, such as flood and hail damage, may warrant a salvage title as well. Similarly to vandalism, most states do not have a space on a title for hail or flood damage, so they issue a salvage title instead.
Things to Consider
When you are considering investing in a vehicle with a salvage title, you should be aware of potential issues you may have down the road. While most insurance companies will still insure a car with a salvage title, their compensation if it’s damaged or totaled in an accident is much lower than it is for other vehicles. Keep this in mind when selecting the details of your insurance.
If you think you may try to sell your salvage-titled car later, you will encounter some issues then as well. For the most part, your only options for selling the vehicle will be to sell it to an independent dealership or a private buyer. Most franchise dealerships do not buy salvage-titled vehicles or accept them as trade-ins.
Additionally, you may find it difficult to determine the vehicle’s worth. In general, the best place to start is with the amount that you paid for the car and to work your way down appropriately. Whatever you do, be upfront about the fact that it’s a salvaged vehicle to avoid fraudulent charges.
Should I Buy a Car With a Salvage Title?
Just because a vehicle has a salvage title doesn’t necessarily mean that you should turn it down for that reason alone. Salvage-titled vehicles can be good options for first-time car buyers or anyone wanting a second vehicle. If you do your research into the vehicle’s history, have it evaluated by a car professional and purchase it from a reputable seller, you may find a salvage-titled vehicle that works for you.
CarTek Collision, serving the Eagle Rock, Los Angeles, Pasadena and Glendale, community, is here for you and all your car servicing needs. We’re here from 8:00 a.m. to 5:30 p.m. Mondays through Fridays, and from 8:00 a.m. to 12:00 p.m. on Saturdays. Give us a call today to schedule your next appointment!
What is a Salvage Title?