What makes a car salvage title

After you have found an insurance company to insure a car with a rebuilt title, you may be able to take more steps to receive more coverage. To prove that a vehicle with a rebuilt title is insurable, you may be able to provide more information to your insurer. This includes a statement from a professional mechanic indicating that your vehicle is in good working condition, pictures that show the its present condition and repair receipts, which is a given when you purchase a vehicle with a rebuilt title.

One advantage of vehicles with a salvage or rebuilt title is that they generally cost much less than those with clean titles. On the other hand, purchasing a car with a rebuilt title can lead to more costs in the long-term if the repairs previously made were not up to par. When you purchase a salvage rebuilt vehicle, you are accepting that extensive damage has occurred to the vehicle.

In some cases, there may still be undisclosed or unseen damages that could arise at a later date. Likewise, even if the vehicle has been fully repaired, you may have trouble finding insurance coverage for the car.

In many cases, those carriers who insure vehicles with a rebuilt title may charge the same premium as a similar vehicle with a clean title, even if your vehicle is worth much less.

Each state has its own regulations, with some being more stringent than others. If you are an experienced mechanic or know one who can do great work inexpensively, then a salvage titled vehicle could be a great buy. In a few states like Ohio, something as innocuous as an abandoned vehicle could earn the salvage title distinction.

Next, see if you can determine who did the repair work and the quality of their work. Taking these steps will help make the process smoother if you are interested in purchasing a vehicle with a rebuilt title.

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In a Nutshell A salvage title is usually issued when car has been damaged in a wreck or other incident and the cost for repairs is more or nearly more than the car is worth. Each state has its own rules that define salvage titles, so check the laws for your particular area. While a salvage title car may be less expensive, the vehicle may not have been properly repaired — and it could be difficult to insure.

Advertiser Disclosure We think it's important for you to understand how we make money. About the author: Lance Cothern is a freelance writer specializing in personal finance. Lance holds a Bachelor of Business Administration in … Read more. When a car has been declared a total loss, either its owner or the insurance company can apply for a salvage title.

Which party does so depends on who plans to retain possession of the vehicle. If the owner chooses to keep a totaled vehicle or didn't have insurance coverage, they would be responsible for applying for a salvage title. If the insurance company repossesses a damaged vehicle after declaring it a loss, the insurer would apply for the salvage title.

Salvage titles can be obtained through the state department of motor vehicles. Though the process varies from state to state, it typically involves filling out an application, paying any required fees, and submitting the car to a salvage vehicle examination. The examination will assess the extent of the damages and the vehicle's overall condition. A salvage inspection is not the same as a regular safety inspection or emissions inspection. During the inspection, the examiner may do all of the following:.

If you go in for a salvage inspection, you may need to bring certain documents with you, including your application for the salvage title, a receipt showing that you paid the appropriate fee, a copy of your insurance company's damage or appraisal report, and a bill of sale for any repair costs or parts you purchased.

If you have a car with a salvage title that you'd like to fix up and return to the road, you'll need to consider your options for insuring it. Again, the rules can vary by state and from insurer to insurer. Some insurance companies may be willing to sell you basic liability coverage for a salvage vehicle that's been rebuilt or restored, while others may not.

Depending on the state, you may need to obtain a separate rebuilt or restored vehicle title that certifies the vehicle's safety before you can get insurance and drive it on the roads. If you're shopping for insurance, take time to compare companies. Look at the premiums they charge for at least the minimum level of coverage that's required in your state. Also think about whether paying extra for collision and comprehensive coverage is worth it, based on the vehicle's estimated value.

Though liability coverage is mandatory in virtually every state, collision and comprehensive, which pay for damage to your car, are optional. If you're considering buying a salvage or rebuilt vehicle, plan to have it checked out by a trusted mechanic to help spot any potential issues before money changes hands.

But there are pros and cons to doing so. On the pro side, for example, it may be fairly easy to find a salvaged vehicle for far less than you'd have to pay for a new or more gently used one. So you might consider a salvage title vehicle if you need a car now but don't have a lot to spend.