Vehicle salvage title requirements

So, how do you register or title vehicles with a previous insurance claim or salvage history that have been through the auction process? Many vehicles come from Copart or IAAI, and those vehicles have prior title claims or title histories that in some cases prevent getting a title or, best-case-scenario, require a lot of steps to get a title. One of those steps is to have the vehicle approved and inspected to go back on the road.

Inspection Process in Washington State
Here’s an example from the state of Washington that talks about how to get rebuilt salvaged vehicles back on the road. This is just a guide that they describe their steps. So the first thing they have to recognize is you have to do the inspection. What’s going to be inspected, right? It talks about the statute in Washington, which is RCW 4612 560. It authorizes the State Patrol to inspect certain vehicles for titling purposes, and part of the inspection is for safety to make sure that the car is rebuilt, but also to make sure that there’s no stolen vehicles and stolen parts used in the reconstruction of the vehicle. So the officer will inspect all major component parts used to construct your vehicle. Documentation must be presented at the time of the inspection to show legal ownership of the vehicle and the parts used. You have to have a title for your vehicle, but you also have to have proof of the source of the parts. This is just Washington State, but many other states, almost all other states, have a very similar or exactly the same process.

When Inspection is Required
So then, when does a rebuilt salvage vehicle require an inspection? If the vehicle has been rebuilt after the certificate of title was turned into Salvage, then a reissued title and registration requires the inspection. What parts are required to pass inspection? Major component parts are what they talk about, and every state has a list of what those are. In this case, it’s anything engines, frame, transmission, body parts like door, front differential, rear clips, quarter panel, seats, hoods, bumpers, fenders, and airbag.

Inspection Details
So when the inspector will look at the vehicle, they’re gonna look at the original damage history report from the insurance company and see what parts were damaged or missing. They’re gonna look to make sure that first of all, those parts are there and fixed to safety standards, but then they’re gonna look to make sure you have receipts to show where they came from. Please note, your vehicle will not pass inspection if any major component parts are damaged or missing. If originally installed airbags must be included in working order. So that’s what they’re gonna make sure first, that the parts are there and they’re not damaged. If you have a crashed car, you can’t bring it in crashed and say, “pass my car now.” If it’s fixed, that’s fine.

Documentation for Inspection
You need to have documentation for the inspection. You have to have the inspection request, picture identification, the certificate of title, or receipts for the component parts. The receipts must be made out to you, the vehicle owner, your immediate family member, or a licensed shop. So you can’t have a receipt that is in somebody else’s name. You have to have bought these parts. Also, the source of the parts is very important to make sure that you have correct parts from a private party. They must be presented with a signed and released title to the vehicle the parts came off or a notarized bill of sale. It’s pretty serious. You can’t just buy, you know, a fender off of Craigslist and just get a slip of paper receipt paying $50 for a fender. You either have to have the title for the vehicle that fender came off or a notarized bill of sale with the VIN number of that vehicle in that part. The notarized bill of sale must include the name, address, and number of the seller, the purchaser, the vehicle information the parts came from (year, make, model, and VIN number), and the date of the sale. They’re pretty serious about making sure that these parts aren’t stolen.

Internet Purchased Parts Restrictions
Here’s the other thing. You can’t buy parts off of eBay. Parts purchased from the internet or electronically will only be accepted for new aftermarket components. You can’t buy used fenders or used parts off of eBay and get them approved for inspection. It has to be either in person or new parts.

Purchasing from Insurance Auctions
Then it gets into if you purchased complete vehicles or parts vehicles, and they even mention the two most popular options, Copart or IAAI. If you purchase from an insurance auction, you need these documents. It gets into the inspection guide. You have to schedule the inspection. You can’t just walk in. That’s a quick guide for the state of Washington. Most states are going to be similar. Use this as a template or a guide for purchasing or fixing a vehicle that’s a salvage. Every state is going to be a little different. Some states have a very specific form that has to have each part identified with a VIN number on the form.

Auction Industry Views on Titles
So how does the auction industry view titles? Well, we’re gonna take a look at Copart and IAAI. Here’s IAAI. They follow all the titling laws. They’re having problems with titles too, right? They’re finding that they’re having to support there’s a legislative update February 2020 written by IAAI. Okay, they are introducing bills. These bills were introduced on behalf of IAAI, allowing insurance companies to apply for titles because many times the insurer will ship these cars to IAAI or Copart and try to auction them off and then never have a title. The buyer can’t do anything with it, and they just stack up on the lot at Copart and they can’t do anything with them, and it takes up space. Copart can’t get titles for them either. We deal with Copart all the time as far as getting titles, so they’re trying to pass laws that would allow salvage pools to attain ownership documents if the vehicle is abandoned at the salvage pool, right? And this only applies to salvage pools.

Legislative Efforts and Challenges
So here’s IAAI, and in this particular example here, Kansas House Bill 2501. Well, it’s so serious that Copart actually gave testimony to try to pass House Bill 2501 that talks about the vehicles abandoned to Copart. We have a vehicle which charges have incurred, there’s no title left on our facility, and they can’t dispose of it. This is a major problem. So here’s the same exact scenario that buyers run into, that even the auctions themselves have difficulties getting titles for the vehicles.

Summary and Recommendations
To make a long story short, if you’re buying a car from Copart or IAAI, expect that the title’s not going to be a clean, clear title, and it’s going to be subject to difficulties of getting a new title in your name. Difficulties could be getting it inspected. Sometimes to get an inspection, if you go back to the rebuild salvage requirements, in order to get an inspection, you have to have a certificate of title to show you bought the vehicle. Well, if you don’t have that, you can’t even get the inspection, but you can’t get a title without the inspection. So it’s kind of like a catch-22. There may be other ways that you can request ownership information. The state of California talks about how to register a junk vehicle if you don’t have the title. You may be able to do a statement of facts in order to prove ownership. Proof of ownership could be a junk receipt or a reassignment form. If you don’t have that, you can use different types of statement of facts. It’s kind of like an affidavit of ownership, but this is what California does. I’m talking about junk and salvage vehicles.

Conclusion
Either way, the Copart or IAAI salvage vehicle is going to have problems getting a title because there’s a history established for that VIN number in a federal database. That’s going to require you, best-case-scenario, to have the vehicle inspected, show all the parts receipts. Sometimes even doing that won’t get you a title if it’s been determined to be a junk vehicle. So do your due diligence when you’re buying a vehicle, either directly from Copart, through a broker, or even through a third party that’s purchased it. If you have any questions, you can reach us at our website at cartitles.com.

Visit Our YouTube Channel for more insights and discussions on various topics. Consider subscribing to our YouTube channel. Click here