When it comes time to buy a car you may put a lot of thought to the make, model, year, and let’s be honest, the color and general appearance. One thing that may not be fresh on your mind is the title.
A car title (a.k.a. certificate of title) is an official document from the DMV in the state where the vehicle is registered. It identifies the owner who is selling the vehicle and lists a few details about the car. Whenever a vehicle is sold, the old owner transfers the vehicle title to the new owner, then the new owner gets a shiny new title with their name on it.
You may have heard the phrase clean title tossed around. That simply means the vehicle has been deemed safe to drive and is fully insurable. All new cars and most used cars will have a clean title. But there are also other types of car titles, such as a bonded title and out-of-state title.
Then there’s the salvage title - the ugly stepchild of the car title world.
The Salvage Certificate of Title
A car is given a salvage certificate of title when it’s damaged to the point that an insurance company writes it off as a total loss. What constitutes a total loss?
It varies from state to state, but generally if the repairs total more than 50-90% of the vehicle’s value it’s considered a total loss. The damage is typically the result of a crash, but a car could be salvaged due to a flood, hail storm or other events that do a number on a vehicle. If the value of the car wasn’t high to begin with, something as simple as a deployed airbag could get a car totaled.
Insurance companies take ownership of these vehicles, get a salvage title and then sometimes sell them to repair shops. Salvaged cars can also be sold directly to buyers at a salvage auction, but either way the vehicle maintains a salvage title.
Salvage Title vs. Salvage Rebuilt Title
As mentioned above, sometimes the salvaged vehicle is repaired by a mechanic before it’s offered up for sale again. A rebuilt salvage vehicle will be given a salvage rebuilt title. This lets others know the rebuilt vehicle went through a salvage inspection and is once again in legal driving condition.
When a salvage title vehicle is beyond saving it will be issued a non-repairable title or non-repairable certificate and hauled off to the junkyard for scrap.
What to Watch Out for With Cars That Have a Salvage Vehicle Title
So, why would anyone buy a motor vehicle with a salvage certificate of title? Because they’re cheap! But that low price tag comes with a number of drawbacks:
- The car will maintain a salvage title forever.
- It could be near impossible to get financing for the purchase.
- Getting car insurance can be just as difficult.
- The safety of the vehicle is questionable.
In most cases, it’s highly advisable to ignore the tempting price tag of a salvage title vehicle for the reasons above. But every now and then a salvage title vehicle can be a good buy if it’s rebuilt and fully restored.
Here’s what you need to know if you decide a rebuilt car might be worth the risk:
The exact title designation - Unless you are a master mechanic or know someone with a shop, you’ll want the car to have a rebuilt salvage title. Other designations to look for include “restored”, “reconstructed” and “clear”.
What’s in the vehicle history report - The vehicle history will give you a better idea of why a vehicle received a salvage title.
What’s in the insurance company’s original repair estimate - This is another way to find out why a vehicle has a rebuildable salvage title. It can also tell you how much money it took (or will need to take) to get the vehicle road worthy.
What repairs were done - If you’re considering a vehicle that was rebuilt from salvage ask the mechanic or new owner for a list of the repairs that were completed.
What your mechanic thinks - Your best bet, if possible, is to take the salvage title car to your personal mechanic and have them give it a once over.
Whether your insurance company will cover it - Only consider a vehicle that you know you can get insured - it’s the law!