What Is a Salvage-Title Vehicle? | Edmunds.com

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What Is a Salvage-Title Vehicle?

A Car Shopper's Guide to "Junk" Titles


You're browsing the used car ads when a vehicle grabs your attention. The car you are interested in has a price that seems too good to be true. You keep scanning the page until you see two words in small print: "salvage title."

A salvage title is potentially a red flag, but the cars that carry them can be inexpensive options for car shoppers on a budget — provided you know what you are buying.

When a vehicle has been in an accident and the total damage exceeds a certain percentage of the value of the car (ranging from 75-90 percent), the insurance company will decide that it is not economically feasible to repair it and declares it a "total loss." What happens next varies by state, but in general, the motor vehicle agency will then issue a "salvage certificate" to the car. This means that the car cannot be driven, sold or registered in its current condition.

Usually, the insurance company sells the car to either a repair facility or parts dismantler. If the car is repaired, most states require that it pass a basic safety inspection before the motor vehicle agency will issue a new title. When the state does issue the title, it's "branded," and notes that the car has been salvaged or rebuilt so future owners are aware of its past.

Different Kinds of Damage
A car with a salvage title hasn't always been in a collision, however. Mark Binder, national salvage manager for Farmers Insurance, says that there are a number of reasons why a vehicle might get a salvage title:

  • Flood damage: Flood-damaged cars sometimes get a salvage title. Some states will specifically call out flood damage on a car's title, but other states merely use the term "salvage title."
  • Hail damage: As with flood cars, the titles of vehicles that are damaged by hail can also get a salvage title if the state does not have a specific "hail damage" designation on the document.
  • Theft recovery: After a vehicle has been stolen and is missing for a certain period of time, the insurance company will pay off the vehicle. If the vehicle is eventually found, the insurance company is free to sell it to a salvager, which will replace any missing parts. Some states will then issue a salvage title for the car.

    According to Carfax, a company that sells vehicle history reports, the following states issue a salvage title after a car has been stolen: Arizona, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oklahoma and Oregon.
  • Vandalism: If someone spray-painted or overturned a vehicle and caused enough damage, the car could get a salvage title. No states specify vandalism in the title, however. It will likely be issued a salvage title.
  • Non-Repairable: A severely damaged and non-operable vehicle with no resale value other than its parts can get a "non-repairable" designation, which some states call a "junk title." In these extreme cases, the state won't allow the vehicle to be repaired and it must either be sold to a scrap yard or destroyed. "Non-repairable" isn't a salvage title per se, but it is important to be aware of the term, just in case you come across a vehicle that's been labeled this way.

Should You Buy a Salvage-Title Car?
There isn't a definitive answer to this. It depends on how comfortable you are with buying a car that has a checkered past. On one hand, salvage-title vehicles can present a value for a first-time buyer, someone on a budget, or someone in need of a second vehicle. In general, buyers can get salvage-title vehicles for two-thirds the price of a car with a clean title, says Richard Arca, pricing manager for Edmunds.com. He adds that luxury vehicles tend to take a greater hit in value when they get a salvage title.

On the other hand, some salvage-title vehicles can be more prone to mechanical problems and have issues with resale value. Mark Binder of Farmers Insurance says there are three things that consumers can do to help minimize the risks of buying a car that will let you down:

1. Have the vehicle inspected: This is one of the most important things to do if you're considering the purchase of a car with a salvage title. Bring a mechanic with you for an inspection. You might also arrange to take the car to a body shop. A car professional will have a better idea about whether the repairs were done correctly and can spot any red flags, such as frame damage or parts that still need repairing.

2. Purchase the vehicle from a reputable repairer: Search for online reviews of the facility that's selling the vehicle. If it's one that's known for making quality repairs, buying a salvage-title car there may be less risky than purchasing from someone without a track record.

3. Ask for the original repair estimate: The best way to determine how extensively the car was damaged is to look at the original repair estimate. This will show you what parts were replaced and how serious the accident was — or if there was an accident at all. Maybe the damage happened in some other way.

If you have any questions about buying a salvage-title car, please reach out to the Edmunds.com Live Help team for free assistance.

Insurance Implications
Most insurance companies will insure a salvage-title vehicle, but if you happen to get into an accident, the total loss payout you'll receive will be much lower. This isn't necessarily a deal breaker, but it is something to consider when you're determining how much car insurance you need.

Resale Troubles
Owners of salvage-title vehicles will encounter some unique issues when they try to sell or trade in their vehicles.

"Most franchise dealers will not take a salvage-title vehicle as a trade-in," Arca says. "Your only options are selling it to a private party or an independent dealership — and they won't give you very much."

Determining the value of the vehicle will also be a challenge. Most appraisal Web sites, including Edmunds.com, assume a car has a clean title, no matter what condition level you select. "Even a vehicle in 'rough' condition can still have a clean title," says Arca.

Since you will most likely be selling the vehicle to a private party, our advice is to use the price you paid for the salvage-title car as a starting point in your sale negotiations. If you've driven the vehicle for a few years, deduct a couple thousand dollars. Test the market with a price higher than what you have in mind and work your way down until you get the offers you're looking for.

Finally, don't hide the fact that your vehicle has a salvage title. If you do, it's considered fraud. The buyer will find out eventually when you hand over the title, or if he obtains a vehicle history report. Honesty is the best policy when it comes to cars with a colorful past.



  • dalbee dalbee Posts:

    Most salvage cars are not repaired by a profesional repair vacility, but buy unliscensed car dealers who are patching these cars together for a quick buck, and selling them to unsuspecting buyers as their personal cars. I am told that salvaged cars comeing from outside of California, are registered in California with a clean title. A auto check report should be run to uncover these cars. Doug Albee

  • dalbee dalbee Posts:

    Most of these cars are not repaired by a legitimate repair facility, but by unliscensed car dealers, patching these cars up to make a quick buck, and selling them to unsuspecting people as their personal car. If a salvage is purchased outside the state of California, it comes into California with a clean title. A VIN check needs to be run, either Carfax, or another provider to determine the history of this vehicle.

  • Excellent article on salvage titled vehicles... We are one of the independent inspectors that help people spot used car issues that have been missed or covered up during the sales process...

  • esmie esmie Posts:

    i rather drive a 2013 salvaged than a 2003 model sold by a dealer at a top dollar, it is obvious this whole ad is fabricated by a dealer. a salvaged car can be a great deal, i personally drive an excellent salvaged car. and all it took was a good research as the one i found at msn.money type in will the recession total your car, along with an inspection by a local shop, i had my husband done the inspection himself. also the car show in the ad is called a non repairable and it is stamp on the title, that is a big dealer lie.. god bless and good luck on your search.

  • For all the success stories about buying a salvage vehicle there are many more horror stories. Buying from an online salvage auction can be very risky. Most salvage auction sites have inspectors who will give the vehicle a once over for a fee. They are usually listed on the sites information page. Another good service is a site called salvageresearch.com They check the history of the vehicle prior to the auction and will tell you if a vehicle has been tampered with to make it look better in the photos.

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