What Does Salvage Title Mean?
When an insurance company deems a vehicle so severely damaged it’s declared a total loss (also called “totaled”), the car’s title will likely receive a “salvage,” “flood,” or “junk” designation. Carfax’s extensive vehicle history database contains title information, including salvage brands; that information is included in our Carfax Reports.
A major accident, a fire, hail, or a significant storm, like a hurricane, can be the culprit in a totaled-car situation. Natural disasters are the most common reason vehicles are designated total losses; Carfax estimates that as many as 358,000 cars were damaged by Hurricane Ian in 2022.
Salvage Title vs. Rebuilt Title
When an insurance company deems a car “totaled,” it doesn’t mean the end of the road for that car. Salvage title vehicles declared total losses often wind up back on the road — some legally, some illegally. If a salvage title vehicle has been repaired legally, it will have what’s known as a rebuilt title.
How Does a Car Get a Salvage Title?
Insurance companies have declared tens of thousands of cars total losses after major storms, and those cars were often resold at auction. Buyers usually dismantle them for parts and crush what’s left over. Still, unscrupulous buyers have rehabbed thousands of damaged vehicles and sold them to consumers in other states without disclosing their histories.
Likewise, some vehicles designated “junk” – meaning they should be used only for parts – wind up back on the road with an apparently clean title through title washing.
Is a Salvage Title Bad?
Legally repaired totaled vehicles will be identified on the title as “salvage” or “rebuilt” vehicles and will typically cost much less than comparable models. Informed shoppers can buy legally rebuilt cars at bargain prices, but a qualified mechanic should thoroughly inspect any such vehicle before its purchased. A vehicle that looks good on the surface may still have severe structural or water damage.
If a vehicle has been declared totaled, an insurance company may refuse to provide coverage for it or charge a higher premium because of concerns about the car’s safety and integrity.
Similarly, lenders may not finance a vehicle with such a checkered past. It’s best to check with lenders and insurers before signing a contract to purchase a salvage vehicle. In addition, once a vehicle is totaled or titled as a salvage vehicle, its factory warranty is typically voided.
Title Rules Vary by State
A “salvage” or “flood” designation on a vehicle’s title should alert subsequent buyers that they’re buying damaged goods. However, each state in the U.S. sets its own rules regarding salvage vehicles. Hence, it’s possible that a car deemed totaled by an insurance company won’t have any indication on its title that it once sustained significant damage.
A car issued a salvage title in one state can be repaired and registered in another state, where it could receive a new title that doesn’t disclose its previous “salvage” status. This process is known as “title washing.”
Carfax Reports Can Help
Title washing is one reason it’s essential for car buyers to obtain a Carfax Vehicle History Report for any used vehicle they’re considering purchasing. Even legitimate sellers may be unaware of a vehicle’s complete history, and shady sellers are good at disguising it.
Carfax Vehicle History Reports provide information on major accidents, structural damage, and damage from hail or floods — whether or not a vehicle was declared a total loss or issued a salvage, flood, junk, or rebuilt (“branded“) title. All that information is tied to the vehicle identification number, or VIN, that Carfax uses to check a vehicle’s history, and it can’t be washed like a title.
If you have questions about this story, please contact us at Editors@carfax.com