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Did you know that there were over 6.75 million vehicles involved in US highway crashes in 2019? Of that, more than 6.56 million were passenger vehicles. Most of these also resulted in property damages, primarily to the involved vehicles.

Unfortunately, many vehicles involved in collisions end up declared as total losses. As a result, their standard automotive titles get replaced with salvage titles.

What is a salvage title, though, and how does it affect an automobile and its owner? Are they only for cars involved in crashes, or are there other reasons for the designation? Most importantly, what can you do with a vehicle that has a salvage title?

We’ll answer all those questions in this comprehensive guide, so be sure to read on.

What Is a Salvage Title?

A salvage title is an automotive title issued to “distressed” vehicles. It means that one or more of the car’s chief components sustained significant damage. These parts often include the engine, transmission, frame, body, bumpers, fenders, or doors.

In such cases, the damage is so considerable that it forced the auto insurance company to deem the car a total loss. A total loss, in turn, occurs when the estimated cost of car repairs exceeds its actual cash value (ACV).

States have varying laws and thresholds when it comes to calculating ACVs. For example, some go by a total loss threshold (TLT), while others follow a total loss formula (TLF).

In states that follow the TLT route, the damage only needs to exceed a certain percentage of the car’s ACV. If it does, then the insurance company can already declare it a total loss.

The TLT varies from state to state; for instance, it’s 60% in Oklahoma, while in Colorado and Texas, it’s 100%. Most others have a set threshold of between 70% and 75%.

About half of the other states enforce the TLF rule. In these areas, you need to add the car’s repair costs with its salvage value. If the sum exceeds the vehicle’s ACV, that’s the only time the insurer can deem it a total loss.

What Is an Auto Salvage Title For?

Salvage titling laws exist to protect consumers and insurance companies from potential fraud. For starters, it’s illegal to operate a motor vehicle with a salvage title on public roads. You can’t even register a car if it comes with a salvage title.

In addition, a salvage title serves as a warning for buyers that a vehicle has significant damage. The problems may have resulted from a collision, a fire, or a flood.

A salvage title may also indicate that the vehicle may have been a part of a property crime. Do note that motor vehicle thefts in the US are on the rise; in 2020, there were 873,080 reported cases of such crimes. That’s more than a 9% increase from the previous year.

So, with a salvage title, car shoppers will know that they’re looking at a high-risk vehicle. Insurance companies also benefit since they can decline applications for salvage title cars.

What Is a Prior Salvage Title and What Makes It Different?

A prior salvage title is a title given to vehicles that once had a salvage title. Some states, such as Michigan, refer to this as a rebuilt salvage title. Either way, it means that the salvage title car underwent repairs to make it road-worthy again.

Cars with prior salvage or rebuilt salvage titles have also undergone salvage inspections. Only state-permitted inspectors, usually police officers, can carry out these procedures. They conduct the inspections only on repaired salvage title vehicles.

If the vehicles pass the stringent inspection, their owners can then register them. Only after that can they replace the salvage title with a prior salvage or rebuilt salvage title.

Can You Sell a Car With a Salvage Title?

Yes, you can, and you should, as restoring a salvage title car can take up too much time and resources. Furthermore, even if you can repair it, it may still fail the salvage inspection.

However, you can only sell a salvage title car if it’s your name that appears on the salvage title. If it’s a co-owned vehicle, you need to get the other owner’s permission first and put it into writing.

Who Buys Salvage Title Vehicles?

Car dealerships, private buyers, and auto salvage yards are some prospective buyers.

Before you take your car to any dealership, though, make sure you confirm they buy salvage cars. That’s because only a few dealerships specialize in salvage title vehicles. These companies often work with auctioneers, or they rebuild salvage cars themselves.

If you’re going to sell to a private buyer, do some background research on the buyer, too. The last thing you want is to sell to an entity that may have involvement in fraudulent activities. Otherwise, your car may end misbranded and sold not as a previous salvage but as a regular “used” vehicle.

If you’re looking for the easiest way to get rid of a salvage title car, an auto salvage yard may be your best bet. However, you should also do your due diligence and choose only a licensed facility. In addition, look for a yard that will pick up and tow your car for free.

Be Careful When Dealing With a Salvage Title Vehicle

There you have it, your ultimate answer guide to the question, what is a salvage title? Now, you know that it’s a designation for severely damaged or, in some cases, stolen vehicles.

For that reason, make sure you think many times before buying a salvage title car. Conversely, it may be best to scrap a vehicle with a salvage title rather than repairing and selling it.

Interested in more automotive or even lifestyle hacks? Head over to our site’s other categories to check out our other recent blog posts then!

 

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