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What is a Salvage Car?

by Autobytel Staff
May 19, 2011

A salvage car has received enough damage that its repairs exceed its value. An insurance company has paid the claim and taken ownership of the vehicle. The vehicle’s plates and an original title have been surrendered to the DMV, and the DMV has issued a new title branded with the salvage designation.

Once a vehicle has been branded with the salvage title, a few things may happen. If the car has been badly damaged, deemed unworthy for the road by the best mechanics, the vehicle will be recycled, either stripped for its parts or crushed and shredded for scrap. Often, if the car has received only superficial cosmetic damage, the insurance company will grant the previous owner the option of buying back the vehicle. If the previous owner declines the option, the insurance company places the vehicle up for auction. Once the vehicle has been purchased at auction, it can fall into the murky realm of automotive libertines who will decide its fate based on its potential to return a profit.

Some salvage cars go to a salvage yard and are sold as is, as salvage vehicles. The seller discloses the damage, sells the car with the salvage title, and the buyer recognizes the vehicle for what it is. Many buyers rebuild the salvage vehicles and believe they have made the best deal possible. Buyers of salvage vehicle do face problems insuring the vehicle, even if its damage was minor, because few insurance companies cover vehicles with the salvage brand. Should the buyer wish to resell a car with a salvage title, he must disclose the salvage title or face criminal charges.

However, if a salvage car needs only a new fender or to dry out from being submerged, it may present perfectly well. It may not look like a salvage vehicle, and those vehicles may cross state lines, move through a series of auction houses, be issued a new title, one devoid of the salvage brand, and rejoin the market as a used car with a clean title.

Once a salvage car has had its title “washed,” its value increases by thirty to fifty percent, which makes the practice very attractive, but it also places a potentially hazardous vehicle into unsuspecting hands. Damaged mechanical components and critical electronic systems have a knack for failing at the worst possible time, and no one wants to feel a brake pedal sink to the floor or a steering wheel go numb when exiting a freeway.

Washing a car’s title in a different state is perfectly legal, and federal legislators regularly debate ways to fix the brand to a salvage vehicle. Many people will consult a CARFAX report since it has become the best means of tracking a vehicle’s history, but insurance companies have no legal obligation to report a salvage title. A car with a salvage title may disappear from one state only to reappear some years later in another state, this time with a clean title, and all perfectly legally.

A salvage car with the title reflecting its brand poses no threat and has its place in the landscape of the automotive world. As a donor vehicle, a salvage car gives its parts to other vehicles to extend service lives and maintain authenticity of undamaged cars. However, with the lure of a profit, salvage vehicles can become the scourge of the used car market, damaged, patched, and placed back onto the road where they have no business. Only hallowed experience and shrewd detective work can ferret out a salvage vehicle that has been repaired and had its titled washed by professionals.

To guard against a salvage vehicle, a buyer must be sure of the vehicle’s lineage, confirm the previous owners and the car’s condition, or the best way of all to protect against a salvage vehicle: purchase a new car.



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