Different states and countries have a way of marking vehicles involved in serious road accidents. In most cases, your vehicle gets a salvage title or a similar notice to indicate it was involved in a severe accident before.
In most US states, you will get a salvage title when your vehicle sustains damage that requires over 75% of the vehicle’s worth to fix. Other states will use a salvage title for stolen vehicles.
Once you have a salvage title, the vehicle is unroadworthy unless it gets a complete overhaul. After thorough repairs, it will have to pass state inspection before getting a rebuilt salvage or rebuilt title (reconditioned, assembled title in other places.
ProTip: A salvage title is never fully cleared. Your vehicle will earn a new legal status as a rebuilt salvage unit.
Can a Salvage Title Be Cleared?
Technically, a salvage title can’t be 100% cleared. Even if your vehicle passes inspection at the DMV, it will get an alternative title that will forever indicate that the vehicle was once a salvage.
Everyone, from potential buyers and future insurers, will know this by glancing at the title. This could be a problem or an advantage depending on what you want to do with the vehicle.
General Steps to Follow When Clearing a Salvage Title
Since the actual steps will vary from one jurisdiction to another, we will give you the general procedure most states want you to follow before you can get your salvage title vehicle roadworthy again.
Buy the Vehicle
The first step to converting a salvage title to a rebuilt salvage is buying the damaged vehicle and transferring it to your name.
Believe it or not, most states will not let you go ahead with the paperwork if the title isn’t under your name.
Note that some states only allow the purchase to be from a licensed rebuilder. If this is the case, you’ll have to contact a repair shop with a rebuilding license to purchase and repair the vehicle for you.
You can only own the vehicle after it has gone through the entire process and received the rebuilt salvage title.
Do Comprehensive Repairs
Once you’ve cleared the above huddle, it is time to do comprehensive repairs on the vehicle.
You can’t DIY – unless you are a certified mechanic. Ensure that you keep all the paperwork in buying parts and paying for extra service you are not qualified to handle. This will come in handy when doing the title change paperwork at the DMV.
Taking photos and recording videos will also come in handy. Most inspectors are professionals and will flag any incompetent repair – even if it is a shoddy weld. Ensure that you get the best people to work on different aspects of the repair.
Pass an Inspection and Handle the Paperwork
Once the car is perfect, test it to ensure every aspect of the vehicle works as it would when rolled out of the assembly line.
You won’t get away with simple problems or deterioration that regular roadworthy vehicles get away with.
Something as simple as rust on the frame or a loose steering wheel that pulls to one side could even deny you approval.
If you are confident that you’ve perfectly restored the vehicle, it is time to obtain and fill all the required forms from DMV.
There will be sections where your photos and receipts for parts will come in handy to confirm that you went through the entire process. You will also need the bill of sale to verify that you purchased the vehicle.
After submitting the paperwork and paying the inspection fee, you can schedule an inspection day. Since your vehicle isn’t roadworthy yet, you will have to tow it or put it on a flatbed on the way to the inspection center.
If your vehicle passes inspection, the inspector will submit this into the system. They might also add a sticker to your car to show that it passed.
Doing the final Paperwork.
Passing inspection doesn’t automatically change your salvage title. This means you’ll still have to carry or tow your vehicle home.
Your next step would be filling up paperwork and paying more application fees to get your new title. Once the application goes through, you will get a new title with a rebuilt statement prominently displayed.
ProTip: Some states inspect on inspecting their own salvage vehicles. It would be easier to register your vehicle in the country you want to use it in, as registration in another state could attract more inspection and fees.
Can You Turn a Salvage Title into a Clean Title?
Many people are advertising that they can convert your salvage title into a clean title. Well. These are scammers. There is no way to legally wipe the history of a totaled vehicle and get rid of the salvage reputation.
The best you can get is the rebuilt title which hints at the past but is still legal and safe enough to be on the road.
Are Salvage Titles Bad to Buy?
A salvage title vehicle would be a bad idea unless:
- You are a certified rebuilder who can repair the vehicle and apply for a rebuilt title
- You want to sell it to someone who is certified to rebuild it for you
- You want to gut it for parts
Other than this, buying a salvage title vehicle, regardless of whether it runs and drives or not, would be pointless.
Sometimes, vehicles can get a salvage title when stolen or with significant cosmetic damage that doesn’t affect structure and drivetrain. Don’t be tempted to buy and DIY fix these. You still have to go the long certified way.
Can You Insure a Salvage Title?
It is not just hard but impossible to insure a salvage title vehicle. Insurers only work with the roadworthy vehicle. Salvage title vehicles are not roadworthy. There would be no point in providing auto insurance for them.
Is it Bad to Buy a Car With a Rebuilt Title?
Rebuilt title vehicles are roadworthy. However, they are cheaper than clean title vehicles of the same age and wear. It could be a deal, but you have to be very careful.
Apart from being cheaper to buy, you will also sell it at a lower price once you’re done with it.
Some of the things to consider and be aware of include:
Talk to Your Insurer
First things first: Insurance. Cars are a menace and unroadworthy without insurance. Before buying a rebuilt title, talk to an insurer and confirm that they can insure.
Get a quote on the vehicle first before buying. Better still, accept the rebuilt title vehicle from professional rebuilders who will, in most cases, already have insurance on it.
You can then take the details to your insurer of choice and see if they can insure the vehicle. Be keen on the premiums. Some insurers will hike premiums on rebuilt titles to the extent that the amount you save on the car won’t be worth it in the long run.
Investigate What Type of Damage Caused the Salvage
Not All rebuilt cars are the same. Since salvage title is a factor in how much money a vehicle needs for repairs, it doesn’t tell you what damage is fixed.
It’s up to you to follow up and figure out what damage caused the problem. For instance, cosmetic damage that did not affect the vehicle’s structural integrity is easier to fix than an accident that beat up the vehicle’s chassis.
Any head-on collision damage that had a severe impact on the engine could also lead to hidden repair costs down the road.
Insurance valuation teams won’t always get their judgment right. You can get a salvage writeoff that was otherwise cheaper and easier to fix. It just looked beat up.
For instance, damaged paint, body panel damage, and damaged glass all-around could invite an expensive repair quote from Mercedes or BMW. In reality, the damage had no impact on the vehicle’s structure and is cheaper to fix at a third-party mechanic. That would be a steal.
ProTip: Use online tools like the National Motor Vehicle Title Information System or the National Insurance Crime Bureau VIN Checker to ascertain that the vehicle history you get from the seller is right.
Ask for Paperwork on the Repairs
Don’t trust the rebuild mechanic’s word – unless you are the mechanic or are a savvy DIY enthusiast who was there throughout the entire rebuild process.
Ask for the paperwork, photos, and videos to prove that work was done. You can also come with your mechanic to inspect the vehicle and confirm that claimed repairs are up to spec.
While this is the work of the DMV inspector, it does not harm to cross-check and confirm that the proper work was done. This will give you peace of mind and help you identify any deal-breakers that might be up to spec but unacceptable by your standards.
Understand that You Can’t Sue Should Things Go South
Different states have different rebuilt standards. A rebuilt title doesn’t necessarily mean the vehicle will be safe and headache-free. This is why you have to do your inspection and history check before buying.
As long as the vehicle passed the test and you can’t sue unless you prove that the inspector was fraudulent and knowingly passed substandard cars.
If the inspector worked within state directives, you are on your own as soon as you buy that rebuilt vehicle.
Note that even though manufacturer recalls will still apply to your vehicle, any accident or damage they believe was directly linked to the accident is in the gray area.
For instance, while a new vehicle with a clean vehicle can sue a manufacturer and win for an accident caused by a suspension bolt not torqued to spec, you can’t sue anyone.
The manufacturer will blame the rebuilder. The rebuilder will argue the vehicle passed inspection and that you did not maintain it.
Expect Lower Prices that Normal
With all these caveats, rebuilt title vehicles will always sell cheaper than clean title vehicles. Everyone already knows the added risk and dislike the title carries.
If you are buying one too, expect to pay very low prices and even push for them. Otherwise, if you can get a similar vehicle on clean titles at around the same price, there is no point in going for the rebuilt title deal.
Can a Rebuilt Title Become a Clean Title?
No. A rebuilt title is the final stop for a salvage vehicle. It can’t legally get better than that.
What is the Downside of a Rebuilt Title?
Rebuilt titles have a couple of disadvantages, some of which we’ve already mentioned above. The most specific that you should be aware of include:
Low Resale Values
You will buy the rebuilt title cheap and sell it even cheaper. If you are comfortable with the low prices, then this shouldn’t be a problem.
Poorly Done Repairs
Just because a qualified mechanic handled the repairs and DMV approved them doesn’t mean they’re well done. If you can’t identify the problems in advance, it will come to haunt you in the future.
You will end up paying more in maintenance than you would have if you spent slightly more on a clean title used vehicle.
Missed Repairs
After an accident, the impact can cause damage in an otherwise unsuspicious place. For instance, the impact from a head-on collision could damage bushings in the rear suspension or strain the fuel pump.
While this won’t be evident right away, the problem will escalate into something you have to fix later.
Similarly, cracks and bends could be missed in the suspension, problems that will need to be fixed in the future.
Hard to Find or Expensive Insurance
While there are insurers specializing in rebuilt titles, most want to steer away from them since such vehicles are still a gamble. After all, you are running significant repairs not tested by a manufacturer.
Those who agree to insure you might impose slightly higher than average premiums.
Getting a quote before buying could help you extrapolate whether the savings you are making on the rebuilt title vehicle is worth it.
Is a Rebuilt Title Beter Than Salvage?
Yes. A rebuilt title is better because it is already a step ahead of salvage. The car will be roadworthy. However, they’re slightly more expensive since someone has already worked on it.
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You can get better savings if you are a certified rebuild or know a rebuilder who can work on a salvage title and don’t mind the extra work. You can find an excellent deal on misjudged vehicles that are easier to fix than the insurance appraiser thought.