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How Salvage Titles Are Determined

So, how is it determined whether a vehicle carries a salvage title or a clean title? States employ various calculations, often based on a certain percentage of damage, such as 75% or 80%. Here, we delve into an example from the state of Connecticut, exploring the Connecticut total loss threshold and its calculation.

  • Connecticut’s Total Loss Calculation: In Connecticut, the process revolves around the 38A-353 statute, specifically the calculation of the settlement amount for motor vehicles. A constructive total loss is defined as when the cost of repair or the cost of both repair and salvage equals or exceeds the total value of the property at the time of loss.
  • Understanding Constructive Total Loss: To illustrate, consider a vehicle worth $10,000 involved in an accident with $6,000 in repairs. Despite seeming like 60% of the value, factoring in the salvage value, the vehicle might still be deemed a constructive total loss. Salvage value is what a dismantler may pay for the vehicle at auction, often enough to offset repair costs.
  • DMV Involvement and Salvage Inspections: Even if a vehicle initially has a clean title, any damage, if brought to the attention of the DMV, could result in a salvage designation. This is especially relevant during vehicle inspections triggered by various circumstances, such as selling, insuring, or servicing the vehicle.
  • Connecticut’s Salvage Inspection Process: Under Connecticut’s salvage inspection regulations (38a 353), there are specific procedures to follow. Two main offices, Weathersfield and Hamton, handle inspections. The owner incurs an $88 inspection fee and must submit a completed inspection report (form B269) before presenting the vehicle. Notably, an MV907a from New York is not acceptable.
  • Inspection Requirements and Process: To pass the salvage inspection, owners must adhere to several requirements. These include presenting a salvage vehicle repair report (K1 186), clear photographs showcasing the damage areas before repairs, and an airbag certification statement for vehicles equipped with airbags.
  • Documentation and Dealer Involvement: Key documents required for salvage inspections involve invoices, receipts for major component parts, and an insurance adjuster’s report, if applicable. Notably, a franchise dealer affiliated with the vehicle’s manufacturer must inspect the vehicle, ensuring adherence to industry standards.
  • Ownership Transfer and Salvage Designation: Owners of salvage-designated vehicles must obtain a duplicate title indicating “Salvage” before transferring ownership. If branded as “Parts only” or “Unrebuilt,” certain conditions apply, emphasizing the need for clear documentation throughout the process.

Buying a vehicle, especially from auctions like Copart or IAA, requires diligence. Even seemingly clean titles can face salvage inspections due to the total loss threshold calculation. Understanding the intricacies of these processes is crucial to avoid post-purchase complications and ensure a smooth salvage vehicle approval process.

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