What is a Salvage Title on a Car? Risks, Meaning, and Buying Guide

If you’re looking at a used car for sale and find yourself asking about a salvage title, you’ll want to have a clear understanding of what that means. This term might raise a few questions: what is a salvage title on a car? How does that change the value of the car? Should we buy a car with a salvage title?

In this guide, we will give you an idea of what salvage titles mean and what the risks are, and we will explain how to buy a car with a salvage title.

What is a Salvage Title on a Car?

A salvage title is a name given to a vehicle that was in a crash to the point of total loss but, because of that, has no saleable value, and an insurance company picks it up. The car was in a bad accident, had been flooded, or damaged to the point where its repair costs would exceed the vehicle’s market value.

Once the insurance company determines the car is a total loss, they will issue a salvage title. This title denotes that the vehicle is not in its original condition and can possibly be not driving the car safely without significant repairs.

Salvage titles almost always mean that the vehicle cannot be used on the road until repaired and reinspected, and even then, will have the salvage designation as a large limiting factor in value.

How Does A Car Get A Salvage Title?

There are several reasons a car may receive a salvage title, with most times the car sustaining so much damage that repairing it would cost more than the car is worth. Common reasons include:

1. Accidents: A vehicle in a major collision might break something important, such as its frame or critical parts difficult and costly to repair. If the damage is bad enough, the damage gets declared a total loss by the insurance company.
2. Flood Damage: Cars that are bumped into flooding water (from a hurricane or steady rain) often sustain damage to all kinds of systems, most specifically the engine, transmission, and electronics. Such damage, being irreparable results in a salvage title.
3. Fire Damage: Fire-damaged vehicles may have irreparable damage to the body and engine. With fire damage, the vehicle’s structural integrity can be compromised making it unsafe to drive until significant repairs.
4. Vandalism or Theft: There are cases where vehicles are stolen, wrecked, and recovered. If the car is bad enough that parts are taken or the car is badly damaged, then the insurance company might consider the car a total loss.
5. Other Major Damage: Even if the car is not badly shaken up in an accident if it costs too much to repair to the insurance company’s liking, a salvage title will be issued.

What Does it Mean to Have a Salvage Title in New York?

A vehicle that’s totaled will get a salvage title in New York given by an insurance company. A vehicle is either written off because its repair cost is more than its market value or because the vehicle is an accident write-off. The process typically follows these steps:

• Accident or Incident: The vehicle has incurred any major accident, fire, theft, or flood.
• Insurance Assessment: When an incident happens the insurance company allots an amount for the damage. If the cost to repair the vehicle exceeds what it is worth (about 70-80 percent of the car’s pre-accident value), the insurance company considers the car a total loss.
• Title Issuance: The insurance company notifies the New York State Department of Motor Vehicles (DMV), who sends the car to be stripped of parts, assigning a salvage title to the vehicle.
• Salvage Title Registration: The car is then put on a salvage title that says it’s been in a major accident and is possibly not safe to drive now.

What is the Difference Between a Salvage Title and a Rebuilt Title?

Though salvage title and rebuilt title might sound the same, they reflect two stages of a vehicle’s life.

• Salvage Title: It’s a title given to a car that’s had enough damage done that an insurance company figures it’s a total loss and won’t pay to repair it. As expected, the car doesn’t have to be roadworthy as the car has a salvage title. In most cases, you aren’t allowed to legally drive it until it has been repaired and re-inspected.
• Rebuilt Title: Once a salvage car with a rebuilt title has been repaired and inspected by a state-certified mechanic, it can be issued a rebuilt title. Another example of a title is a person who has restored a vehicle to a condition that is safe to drive, which is called roadworthy. Nevertheless, it has a history of having been once salvaged.

Is It Safe to Buy a Salvage Title Car?

Buying a salvage title car is safe as long as you follow these basic precautions, but there are huge risks with buying a salvage title car. Here’s what you need to consider:

• Quality of Repairs: These ‘salvage title’ cars may have been poorly repaired or repaired with parts deemed substandard. No matter how the job looks visually, it could have hidden problems that compromise the car’s safety and longevity.
• Insurance Issues: The problem is that salvaged title cars are inherently difficult to insure, and you probably only get liability coverage, not repairs or replacement if the car is damaged again.
• Resale Value: Also it will be hard to sell the car later and get a good price. The problem here is salvage title cars sold theoretically have hidden risks and may pose future difficulties.
• Long-Term Problems: A salvage title car could develop long-term issues, especially if the original repairs weren’t done properly. These can be structural, which can be a problem, or critical car systems such as engines, transmission, or brakes.

How to Buy a Salvage Title Car in New York?

If you’re considering purchasing a salvage title car in New York, follow these steps:

1. Research the Vehicle History: Always check the vehicle’s history to understand the reasons for the salvage title. You can get the details of the accident, flood, fire or other incidents from Vehicle History Report.
2. Get a Professional Inspection: Have the car thoroughly inspected by a mechanic or specialist who is familiar with salvage title vehicles. It can show you any hidden problems the car may have that can’t be seen immediately.
3. Know the Costs of Repair: Decide whether the cost of repairing the vehicle will be worth doing. When you are buying a vehicle as a good purchase consider the cost of repairs, parts and labor.
4. Understand New York’s Regulations: An inspection car must be passed in New York before a car can be legally driven again. This inspection is to ensure the vehicle has been repaired right and is safe to be on the road. If the car fails a rebuilt title may be given if the car passes the inspection.
5. Negotiate the Price: Since salvage title cars are typically worth less than clean title vehicles, negotiate the price accordingly. Remember to inform the seller that you know about the risk.

The Financial Impact of a Salvage Title Car

Purchasing a salvage title car can have significant financial implications:

• Lower Purchase Price: Salvage title cars are sold at a discount, often 20-40% less than a comparable clean-title car. The lower price can be appealing, but bring the vehicle to the buyers’ attention and you will also find that vehicle will come with expensive repairs or someting that will become problem after few months of buying.
• Higher Insurance Premiums: Many insurers don’t offer full coverage, and thus, insuring a salvage title car is usually more expensive. Even if you can get insurance, the rates may be higher because it’s a car’s history.
• Future Repair Costs: The only way you knew was whether they needed a lot spent on repairing or not. Salvage title cars can be plagued by chronic issues with expensive maintenance.
• Depreciation: To the contrary, salvage title cars will still depreciate faster than regular cars. If, for some reason, you do want to sell or trade the car, then you may not receive the majority of your investment value back.

Is It Legal to Sell a Car with a Salvage Title?

It may be possible to sell a car with a salvage title, but it’s not always easy. A purchase history with an affiliate is going to put many buyers into caution mode and you may need to lower your asking price by quite a bit to get people interested in purchasers. Here’s what you need to know:

• Disclosure: It is important to disclose the salvage title to potential buyers. Otherwise, the buyer will demand a refund or get you in trouble later.
• Limited Buyer Interest: Salvage title vehicles have a high risk of hidden damage or repairs, and many buyers prefer to avoid dealing with them. That means you could spend more time on the market.
• Selling to Dealers: Though some dealers will be willing to purchase salvage title cars, they will certainly not offer you what you paid for your car, as they too have to take repair costs and reduced value into consideration.

Pros and Cons of Own Salvage Title Cars

Pros:

• Lower Initial Cost: Salvage title cars are extremely cheap compared to cars with a clean title.
• Potential for Restoration: Restoring a salvage title vehicle is a challenging project if you like working on cars.
• Access to Rare Cars: If you need a car and can’t stretch your budget any further, salvage title vehicles can provide you with access to cars that might otherwise be out of your price range.

Cons:

• Uncertainty about Repairs: There are hidden issues that can be expensive to fixture.
• Difficulty in Insuring: It can be difficult or even expensive to get full insurance on a salvage title car.
• Lower Resale Value: You may not get back your full investment when you sell the car if you want to.
• Safety Concerns: Particularly in cases where damage is extensive, the vehicle may not be as safe as one with a clean title.

How People Might Be Misled About the Salvage Title Cars?

• They are always unsafe: Not all salvage title cars are bad. A lot of them are repaired back up to roadworthy condition but first they should be checked.
• They are unrepairable: Salvage title cars range from ones that can’t be fixed and restored to a safe condition to those that can.
• They’re always cheap to buy: The first thing is that the initial purchase price is cheap, but sometimes salvage car repair costs can end up costing more than a standard car.

Legal Aspects Of Salvage Titles In New York

Any car in New York with a salvage title must first go through an inspection before it can be legally driven. This is to check the safety and roadworthiness of the vehicle, as well. If the car passes it will be rebuilt get a rebuilt title and be allowed to be driven again. The vehicle however always has the history of its salvage title.

Restoring a Salvage Title Car To Drivable Condition

Restoring a salvage title car involves:

1. Repairing Structural Damage: Make sure that the frame, engine, and other essential parts of the car are restored to their unique, safe condition.
2. Repainting and Cosmetic Work: Repair, repainting or removing body damage if required to return the car to its appearance.
3. Passing State Inspection: After repairs are finished, take it to a state certified mechanic for inspection. The rebuilt title will be issued to the car if it passes.

Conclusion: Can You Buy or Sell a Salvage Title Car?

A salvage title car has its risks, whether you buy or sell it, but with some precautions and an understanding of the process, it’s an enjoyable process as long as you know what you’re doing. If you’re buying, make sure inspections and research are thorough, and you weigh the long-term financial consequences before acting. If you’re selling, disclose the salvage history and adjust your price accordingly if you’re selling.

FAQs – What Is A Salvage Title On A Car?