Home » Articles » Titles » How Salvage Titles are Changing in 2022
A salvage title is a permanent title designation that is assigned when a vehicle has sustained a high amount of damage. Some states allow for these titles to be converted into rebuilt titles, but they will always have a salvage designation.
Once a vehicle has received a salvage title, it cannot be returned to its previous status. It can only be sold to a dealer or another individual as salvage. A rebuilt title is often issued when the car has been restored and found to be road-worthy.
A salvage title is almost always issued by an insurance company. Each state has its own threshold of damages that must take place to designate a salvage title. Some states require 50% of the total book value in repairs, but some up to 100%. If a vehicle has repairs that accumulate to more than this threshold, it can be issued a salvage title. If the insurance company has paid a total loss claim, more than likely it’s because the vehicle crossed the percent of damage threshold.
In other words, if you were in an accident and your vehicle was totaled out because it would cost more than 80% of its value to repair it, you may have received a salvage title from your insurance company. It’s also possible that you had no collision coverage and could not afford to repair the vehicle, so you received a salvage title from the Department of Motor Vehicles (DMV) instead.
Many insurance companies are beginning to issue nonrepairable, junk, and parts-only titles to vehicles they used to deem as salvage. The DMV and insurance companies are cracking down on curbstoning. Curbstoning is an illegal scheme where an unlicensed dealer will buy cars from auction, say they were a personal vehicle, poorly repair the vehicle, then resell it to a new owner who has no idea of the title history. It’s not illegal to repair a salvage vehicle, but it is illegal to claim the proper repairs were made to meet state requirements when this is not true.
In order for the title on a salvage or rebuilt car to be road-safe, all states require a professional inspection of the vehicle. This can be done by certified mechanics or through the DMV. The mechanic will go through every part of the vehicle, make sure it meets state requirements and road safety standards, and note any problems that need fixing.
If you have a salvage vehicle, first check the NMVTIS database to make sure it’s salvage and not nonrepairable, junk, or parts-only. Check the requirements in your state to learn about the repair process. If you’re an auto repair or rebuilding shop, make sure to follow all state regulations for repairing salvage title vehicles. In many cases these vehicles can be repaired and put back on the road with no problems; however, if improperly repaired and put back on the road they may present significant safety issues.
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