Salvage Title Information
Once an insurance company pays out a claim on a vehicle, they become the new owner. They are issued a Salvage Title or Salvage Certificate by the Department of Motor Vehicles in the state where the application is submitted. Some of the cars are beyond repair, and are therefore issued Parts-Only, Scrap or Junk Titles (sometimes called Certificate of Destruction). For both vehicle types, insurance companies will deliver the cars to their local salvage auction for resale to motor vehicle dealers.
Once a dealer purchases this vehicle from the salvage auction, the salvage title is transferred from the insurance company to the dealer. Now the dealer has three options for the salvage car:
- Repair the vehicle
- Sell it to another dealer or auction
- Sell it to a private individual
For all rebuildable vehicles, a salvage inspection is necessary before a new title can be issued. This inspection process varies from state to state. In most cases, the general procedure is as follows:
| Step 1: |
An inspection is scheduled through the Department of Motor Vehicles in the owner's state |
| Step 2: |
The vehicle must have all body and mechanical work completed, with a written record of all parts used in the rebuild process |
| Step 3: |
The vehicle is taken to the state inspection station along with all parts receipts |
| Step 4: |
Upon passing the inspection, the state will issue a new title for the rebuilt vehicle branded as Salvage or Rebuilt |
The new rebuilt title is identical to a regular title with the exception of the branding, which will follow the vehicle through all future sales/transfers.
To determine the specific salvage inspection procedures in your state, please visit the onlinedmv web site.
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