Why Dealerships are Moving into the Salvage Title Business

Anyone who has shopped for a car recently knows even the used car market is seeing a continued elevation in prices. While not as steep as the 2022 peak, as we head deeper into 2026 it’s clear that these prices are not dropping as much as many would like or expect. The ongoing lack of affordability is impacting used car dealers in much the same way as the end-buyer. Without more affordable options to choose from on the car lot, inventory is more stagnant than in years past.

The Rise of Dealerships in the Salvage Car Title Market
To address the lack of affordable inventory, more dealerships are starting to consider an option that was once thought of as taboo: vehicles with a salvage title. A salvage title is ownership documentation that reflects the car was deemed to be a total loss due to heavy damage, to the point that repair costs exceeded a certain percentage of its value. And to add insult to injury, because of the rising costs to make those repairs, it’s now taking less and less damage to meet the insurance companies’ definitions of “totaled.”

When a vehicle is declared to be totaled, it cannot be registered as road-worthy until it has been repaired, inspected, and re-titled with a rebuilt title. Causes of loss include major impact damage, flooding, fires, and even theft. Historically, buyers would have to take to the Internet via channels such as Facebook Marketplace or Craigslist for vehicle inventory with salvage titles. Under the right circumstances, these salvage title vehicles can mean big savings, even with the needed repairs. Car dealerships are giving these a second look as a way to fill the gap in affordable used car inventory.

From Salvage Title to Rebuilt Title: Getting these Cars Ready for Sale
Dealership sites such as Copart and IAA help create a marketplace for these damaged vehicles, and dealerships are increasingly scooping up good deals at these auctions. By looking for certain criteria, dealerships can source damaged inventory that will be reparable and ready for the car lot in a fairly short amount of time. Just as with individuals purchasing auction vehicles, dealerships can also run into issues with securing the existing title so they can ultimately get it re-titled in their name. Occasionally, dealerships will need to seek a court-ordered title if the original car title cannot be located.

To get a salvage car ready for sale, the dealership completes the necessary repair work, documents those repairs, and completes all needed safety inspections based on local requirements. These inspections include verifying that no stolen parts were used, checking the VIN to ensure vehicle authenticity, and completing any required emissions testing. All of this is required to apply for a rebuilt title (also known as a branded car title), which makes it possible for the end buyer to properly register the vehicle.

The Pros and Cons to Dealerships Selling Rebuilt Title Vehicles
The increased inventory in more affordable price points is clearly the biggest benefit to dealerships being more willing to work this process. Salvage vehicles, once repaired and certified with a rebuilt title, retail at 20-50% less than comparable, clean-title used cars. And with the added benefit of working through reputable car dealerships, buyers can feel confident that all repairs were completed properly.

However, as with any car purchase—new or used—there’s always the potential for mechanical failure, and this is not any less so with rebuilt titles. Even under the most rigid repair standards, car issues can go undetected until much later in the vehicle’s lifespan. Additionally, not all insurance companies will insure rebuilt titles, so buyers need to do their research before making that purchase. And since the vehicles are starting out at lower price points, their values will continue to be lower than their clean-title counterparts. While these cars can be a tremendous bargain in the marketplace, the buyer must beware and go into this process considering all factors. If there is an issue obtaining a vehicle’s previous title at any point in the process, CarTitles.com can help. Reach out to our team at the link below.

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