What is a Rebuilt Title or a Salvage Title?

A salvage title is a term used to brand titles of vehicles in North America. This basically means that the automobile has been badly damaged. For this type of title, it is possible that the insurance carrier paying the claim has categorized it as an absolute loss. Different states do not necessarily have the same categories for establishing whether or not a salvage title should be issued. In few state regulations, stolen vehicles automatically get salvage titles. However, in other states this is only done to cover losses that were caused by the damage. In some cases, it is possible to remove candidates for salvage titles by replacing it instead with rebuilt salvage. It’s also noteworthy to know that cars that have been imported in or exported outside the US can have clean titles. This is possible regardless of the vehicle’s history. Even if the car has gone through an accident, the title remains clean

Some cars and motorbikes have salvage titles despite having small problems that can be repaired easily. This makes it attractive to some investors and hobbyists. It would be wise to take caution when buying a vehicle with a salvage title because other damages might be well hidden. When an owner discovers that these can no longer be repaired, the machine might just be a pile of junk.

The “salvage” status is given when the insurance company has established that the total cost of replacement parts or repair is more than 75% of the vehicle’s market value. The basis would be the value of the vehicle during the theft or accident. Limits can include a range between 50-95%. The category of “total loss” is left to the discretion of the insurer. When a salvage title is issued, it doesn’t necessarily follow that the vehicle as no more value. For instance, in Michigan salvage titles are handed out if the damage is between 75-90% based on the value of the vehicle prior to the damage. On the other hand, losses accumulating 91% or higher are only given “scrap” titles. These can no longer be upgraded.

Generally, after the insurance carrier pays the claim, it may even return the vehicle. The owner would then carry the responsibility of repairing the vehicle and it being inspected by an authorized state facility. The location matters because some states may change the status of the title by no longer branding it as salvage. Percentages that establish such are based on state laws and regulations. If the status of the title remains the same, vehicles with a salvage titles will be auctioned to a rebuilder or auto recycler.

There are some states that do not allow vehicles with salvage titles to run on public roads. This, in turn, greatly affects their value. In all cases, rebranding is only permitted when all the safety standards have been met and the vehicle has been thoroughly inspected. These are considered to be very stringent checks. Many insurance companies practice what we call “Title Washing”. This is when the vehicle registration is transferred in order to change or do away with a title brand.