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Buying a Car with a Salvage Title — FAQ

Carfax, Cars for Sale, First Time Car Buyers

Salvage titles inspire fear in the hearts of car buying newbies. They also promise filthy lucre to unscrupulous salvage auction resellers. For the seasoned auto buyer, buying a car with a salvage title offers big savings. Let this FAQ help you sort it all out.

Q: What is a salvage title?

A: The Car Insurance Rates site reveals that insurance companies signal the state to issue salvage titles if paying to fix the autos is more expensive than replacing them. For example, if a car accident — or recently sustained flood damage — results in a repair cost that exceeds about 75 percent of the vehicle’s market value, the insurer may opt to cut its losses. Paying the insured, the car’s title now sports a tiny “S” that signals a vehicle, which is salvaged.

Q: What happens to cars with a salvage title?

A: It is a common misconception that these cars get junked. Instead, the owner may keep the vehicle, let the insurance company sell it via a salvage auction or try to sell it privately for parts or scrap. A salvaged title must be disclosed during a transaction.

Q: What is a revived salvage?

A: In some cases, the car’s owner or another buyer may attempt to repair the car. In the state of California — and in other jurisdictions — the person who does the repairs can turn in the salvage title for one that reads “revived salvage.” Before doing so, the California Highway Patrol inspection unit must give the car an operational check and declare it street-legal, which also requires a break and lights inspection certificate. This type of car can be legally registered in the Golden State. Check the DMV.org site for state-specific information on re-registering cars with salvage titles.

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Q: Why are there so many warnings about salvage titles?

A: Tom Torbjornsen from AOL Cars warns that chop shops — and shady entrepreneurs buying wrecked cars for sale — occasionally turn around and attempt to sell the cars as used or at auction. Smaller car sellers and private bidders are easy prey, especially if a late model luxury car at a killer deal comes their way. Not thinking of researching the title, they buy — and later on possibly resell — the vehicle without researching its history.

As a result, someone drives a car that either will develop serious long term repair problems or end up with an unsafe vehicle. A twist on this scam is the unscrupulous car seller who applies for a duplicate title right after wrecking the car; while giving the insurer the original to receive payment, the scam artist uses the duplicate title to sell the repaired wreck. Until the new owner tries to register the car — probably a few states over — the fraud doesn’t come out.

Q: I want to buy a car at a great salvage title value; what could possibly go wrong?

A: What couldn’t? If the vehicle has been in a serious accident, there is a chance of frame damage, which threatens the integrity of the entire structure. Flood damage leads to heavy corrosion and even gallons of cleaner cannot mask the smell of mold and mildew that will reappear after the first summer rain. The car may be unsafe or become a huge sinkhole with respect to ongoing or recurring repair expenses.

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Q: Is there a problem with insuring this type of vehicle?

A: Buying a car with a salvage title essentially means that another insurer has already cut its losses. There is a good chance that insurers do not want to put money on this vehicle. While it is possible to find a company that will write a liability policy — depending on your state of residence — the costs may be prohibitive. Adding insult to injury, you will find that in the case of an accident with the car, you will receive far less in compensation.

Q: I’m not a car guy (or car gal); what do I need to know?

A: You want to ride safely; do not contemplate buying a car with a salvage title. This is an exercise for those who a) know what to expect and b) have already discussed insurability with an agent. Make a vehicle title report part of the used car purchase deal — a CarFax report is done over the Internet while you wait — and do not do business with a seller who is unable or unwilling to produce it.


Car Insurance Rates: “What is a Salvage Title?
DMV: “Salvaged Vehicles”
AOL Cars: “Beware Flood Damaged Cars Sold as New”
CarFax: “Show me the CarFax”