Drivers Education

Why Would a Car Have a Salvage Title?

Why would a car have a salvage title? A car can have a salvage title for several reasons. Normally, you are not advised to buy a car with a salvage title, but not all salvage title cars are bad. I.e., a salvage title on a car does not automatically mean freighting it to a junkyard.

Generally, a car with a salvage title could have been involved in an accident, and the insurance writes it off as a loss because the repair cost is higher than the actual value of the car. After evaluation, the car receives a salvage title certificate if the insurance adjuster declares it a total loss.

Typically, the insurance company totals a vehicle if the repair cost is 70-75 percent of its current market value, which is pegged below the book. Moreover, various insurance companies use different benchmarks. A new paint job on a severely damaged car can add up quickly, especially on older cars. So, the adjuster is highly likely to total the vehicle and get it a salvage title while compensating the affected individual.

Why Would a Car Have a Salvage Title?

An insurance company will declare a car totaled if the repair cost is more than the actual value. If the insurance proceeds with the repair, it becomes a high-risk vehicle, and there are chances they’d have to total the car not long after because if it’s involved in a wreck, it won’t survive it.

Damaged cars receive salvage titles after vehicle repairs. In North America, for example, a salvage title is a car title rebranding, indicating damages on the car, typically after being totaled by the insurance company responsible for paying the claim. Depending on the state and insurer, a salvaged title is issued following a set guideline.

In Canadian provinces, a stolen car may be issued a salvage title if not recovered by the police within a certain number of days, typically one month. The insurance then declares the car totaled and pays off the claim. In some states, only damages warrant the issuance of a salvage title on a stolen vehicle.

When a car is rebuilt and passes an inspection test, it can get a rebuilt title, making it road legal. Some experts claim that a vehicle either exported or imported into the US may be given a clean title irrespective of the title history.

A car owner may also permit the insurance to total a car if they do not buy it off the insurance and get it back on the road.

What about salvage titles on stolen cars?

Also, a clean title car can get a salvage title. It is mostly related to crime, and a thief uses a salvaged car to give a new identity to a stolen car following a process known as VIN switching. For example, after a car is stolen, the thief buys a similar car model from a scrap yard for a few bucks. They change the VIN of the stolen car to match the wrecked car with a salvage title and sell it as rebranded. The rebuilt title reduces the car value, but some thieves go the extra length to do title washing, changing the rebuilt title to clean.

As mentioned earlier, a salvage title on a car does not necessarily mean the car is destined for a scrapyard. Depending on the state, a car might receive an irreparable or repairable label, showing whether a car should be recycled or rebuilt.

Before you rebuild a car with a salvage title, make sure to check your state laws for application guidelines. If you can meet the requirement, proceed with the eth rebuilding process. Otherwise, do not waste funds.

Is it worth buying a car with a salvage title?

Buying a salvaged car may not be worth it, but not all salvage title cars are wrecked devastatingly. Some would have been stolen and given a new VIN; thus, passing the salvage title of a wrecked car to it, which means the stolen car is not literally wrecked.

Some salvage title cars are not worth it, though. Besides, a car with a salvage title means that the damage level is not roadworthy.

If you buy a salvage title car and can restore it to pass the inspection test, it might be worth your effort. However, you may want to reconsider buying a salvage title car.

First, a typical finance company or bank is reluctant to finance salvage title vehicles. The reason is that a car with a salvage title may not have a Blue Book value. Moreover, the company is unsure of the vehicle history, whether involved in a flood, crash, theft, etc. Since the finance company is unsure how worthy the car is for the road, it becomes a problem.

Trading a salvage title car is another major problem. Most car dealers would not accept salvage title cars for trade-ins, obviously because it would be challenging to flip the car for profit.

The insurance company is another major factor regarding whether it’s worth it to buy a salvage title car. It would be difficult to find an insurance plan for a salvage car, and when you do, you get expensive insurance premiums. The reason is that the insurance considers a salvage car high risk.

Can you find out why a car was salvaged?

Yes, you may be able to find out why a car was salvaged, but it can be challenging to tell the level of damage. An insincere seller will lie about the vehicle damage level, but you can rely on a few factors. First, obtain the vehicle history report. You can pay for a detailed vehicle history report to determine the incident a car was involved in. Also, get a professional to inspect the vehicle thoroughly. You should read the steps to buy a car, especially if it has a salvage title.

Can a Salvage Title Be Cleared?

Yes, a salvage title can be cleared. After a car is issued a salvage title, you can restore it to become road-worthy. And when it passes the safety inspection test, it is issued a rebuilt title. Nonetheless, you may be able to wash the title to make the car road legal. See the steps to get rid of a salvage title on a car.

Final Thoughts

A process like issuing a salvage title is put in place to protect consumers, auto dealers, finance companies, and insurance companies. Otherwise, many vehicle owners would be driving in damaged cars that are life-threatening during a crash.

Finally, a car with a salvage title does not mean it is completely wrecked and meant for the scrap. You could still purchase and invest in changing the salvage title to rebuilt and flip it for profit.

Latest posts by Bernard Juchli (see all)

Bernard Juchli

Bernard Juchli is an experienced racer, mechanic and team owner who trusts Avon Tyres.Bernard is the lead driver and force behind his Big Dog Garage Race Team. He is the General Manager and Chief Mechanic of Jay Leno’s Garage. Bernard and his crew of seven are responsible for all repairs, restoration and fabrication of Jay’s incredible automobile and motorcycle collection.

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