The exact definition of what it means when a car has a salvage title can vary from state to state, but the conditions for which a vehicle’s value can be deemed a total loss tend to be similar. Generally, a car is designated as having a salvage title if the vehicle in question was damaged and a car insurance company has “written off” the vehicle by paying out a claim after deeming the cost of repairs to exceed the value or worth of the vehicle. You will want to check with your state’s specific laws and regulations as to just what qualifies as a salvage title vehicle.
A car can receive a salvage title for a variety of reasons. A salvage title may be issued to a vehicle that was written off after a serious accident, then repaired by a body shop or mechanic. These are sometimes referred to as a “rebuilt title.” A salvage title can also be issued on a theft recovery, where the car was recovered after the insurance company paid out the insurance claim but before authorities were able to find the stolen vehicle. It should be noted that some states designate a difference between rebuilt vehicles and a salvage title, while others do not. As such, some people will use the terms interchangeably, even though they don’t always mean the same thing.
Another example is when cars are damaged by nature. In the aftermath of Hurricane Harvey in 2017, many vehicles in the Texas Gulf Coast area experienced such severe flood damage that the cost of fixing them was deemed too expensive. In this case, insurance adjusters were sent out to evaluate the damage. Most of the cars that were declared a total loss for their owners eventually found their way to auctions, where they were bought for parts or scrap.
If you are considering buying a salvage vehicle to repair and drive, it is imperative that you research it extensively. Your state may have special rules that the owner of a salvaged car should be aware of in order for a sale to take place. In addition to having a special title issued, your state may require a vehicle inspection to verify that the salvage or rebuilt car is safe to drive.
Because the rules are different in every state, there is a risk of title fraud. When buying a used car, make sure to get a copy of the title history. Any time a car is written off and reported as such, the state will report it on that car’s title as wrecked or salvaged. It is also important to know that not all insurance companies will insure a car with a salvage title. In addition to researching your states rules and regulations for salvaged vehicles, you may also want to talk to your insurance agent.