Millions of vehicles are issued salvage titles in the United States every year. Many of these cars are repaired and sold, sometimes by sellers who fail to report, or try to hide the salvage title. CARFAX can help consumers protect themselves from unknowingly buying a salvage vehicle.
A salvage vehicle is any vehicle that has been issued a salvage title by a state motor vehicle agency. A salvage title may indicate that a vehicle is not road worthy after being damaged in an accident, flood, fire, or other event. In many states, a salvage title is issued when a vehicle is damaged to the extent that the cost of repairing the vehicle exceeds 75% of its pre-damage value, though the damage threshold may vary by state.
Sometimes, but not always, vehicles that have been declared total losses by an insurance company are also issued salvage titles. Insurance companies often have different criteria than motor vehicle agencies for determining if a vehicle is totaled.
A salvage title does not always indicate that a vehicle was wrecked. In some states a salvage title may indicate that a vehicle was stolen. These states include Arizona, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oklahoma and Oregon.
Some states do not require salvage titles for older vehicles. For example, a state may assign a salvage title to an older-model vehicle only by request from the vehicle owner.
Salvage Title Fraud
A seller should disclose if a vehicle has a salvage title. In some states disclosure is required by law. Unfortunately, salvage titles are not always revealed. Every year, thousands of salvage cars are sold to unsuspecting buyers, and in the process, returned to the roads without proper repair.
A common scam associated with salvaged vehicles is title washing. In title washing, a seller moves a vehicle to a state that has looser title laws and then registers the vehicle in that state. Depending on that state’s title laws, the state may not indicate that the vehicle ever had a salvage title. In a title-washing scam, the seller may register the vehicle in multiple states until the salvage brand is removed from the title.
Car clipping is another problem associated with salvaged vehicles. In car clipping, two wrecked vehicles are literally sawed apart, and the ends of the separate vehicles are welded together. For example, the front end of one salvage vehicle may be welded on to the back end of another vehicle. Clipped vehicles can be difficult for the average used car shopper to detect.
Rebuilt Salvage Titles
Salvage vehicles that are properly repaired or restored can be returned to the road legally and safely. Many states require that a vehicle pass an inspection to determine if the vehicle is roadworthy. Vehicles that pass this inspection are sometimes issued rebuilt titles or the title may still say salvage. The inspection process may differ from state to state. Some states require that the owner provide receipts for component parts that were used in the repair process.
Buying a salvage vehicle might not be a bad investment, although it’s recommend that before you buy a salvage car you understand the prior damage that resulted in the salvage title being issued. If you are considering buying a car with a rebuilt salvage title, we recommend that you make sure repairs were made by a licensed mechanic.
Protect Yourself from Salvage Title Fraud
To determine if a vehicle that you are considering buying has a salvage title, ask the seller to show you the title document. Look for wording on the title that indicates a salvage title. The wording can vary from state to state. If the words totaled, reconditioned, salvaged, junked, rebuilt, or warranty returned appear on the title, then it is a salvage vehicle. In some states, salvage titles are printed on different color paper than non-branded titles.
If the title does not indicate salvage, examine the title document to see if it has been physically altered. If the title looks like it has been altered in any way, beware.
We also recommend that you order a CARFAX Vehicle History Report. CARFAX receives vehicle history information from every U.S. and Canadian provincial motor vehicle agency and guarantees to indicate if a vehicle has a reported salvage title. A CARFAX Report may also indicate if a vehicle has been declared a total loss by an insurance company, even if a salvage title was not issued by a state motor vehicle agency.
In addition to getting the CARFAX Report before you buy a car, we always recommend that you take a test drive and have the car inspected by a qualified mechanic.
For information on salvage titles laws in your state, contact your local DMV.