What is a Salvage Title Car?
A salvage title is a designation given to a vehicle that has been damaged or deemed a total loss by an insurance company. According to Edmunds, “A car is declared a total loss when the estimated repair cost exceeds the actual cash value of the vehicle.”
When this happens, the insurance company pays out a claim to the owner for the pre-accident value of the car, minus any deductible. The insurance company then takes possession of the totaled vehicle and sells it at a salvage auction.
At the salvage auction, the severely damaged vehicle is sold to a dismantler, scrap yard, or rebuilder. The vehicle can no longer kept its regular title status and is issued a salvage certificate or salvage title. According to Car and Driver, “This certificate replaces the original title, and it ensures that nobody tries to sell the car without disclosing the salvage status.”
A vehicle with a salvage title has likely sustained major damage, with repairs estimated to cost more than the car’s pre-accident value. While salvage title cars can be legally driven again after rebuilding, they still retain their salvage designation. This is different from a rebuilt title, which indicates the necessary repairs have been made to restore the vehicle to roadworthy condition again.
Salvage Title Laws in Virginia
Virginia has specific laws regarding salvage title vehicles. According to the Virginia DMV, a salvage title is issued when an insurance company deems a vehicle to be a total loss after an accident or other damage. The insurance company must apply for a salvage title within 30 days of taking possession of the vehicle [1].
Once a vehicle has a salvage title in Virginia, it cannot be legally driven on public roads. The vehicle must be towed if it needs to be transported. The salvage title remains with the vehicle until it passes inspections and is issued a rebuilt title [2].
To get a rebuilt title in Virginia, the rebuilder must submit an application along with receipts for parts used in rebuilding the vehicle. The vehicle must pass a Virginia safety inspection, a salvage inspection, and an emissions inspection if applicable. Once approved, the vehicle can be registered and driven legally in Virginia.
Registering a Salvage Title Car in Virginia
Yes, you can register a salvage title car in Virginia, but there are specific requirements for doing so. According to the Virginia DMV, in order to register a salvage vehicle in Virginia, you must have a valid salvage title for the vehicle.
To obtain a salvage title in Virginia, you’ll need to submit the following to the DMV:
- The original title
- A completed Salvage Certificate Application (Form VSA 56)
- An itemized estimate of the repair costs
Once you have the salvage title, you can register the vehicle. The registration process involves:
- Getting the vehicle inspected by law enforcement
- Paying sales tax on the value of the salvaged vehicle
- Purchasing Virginia license plates
- Providing proof of insurance
Virginia also requires salvage vehicles to pass an annual safety inspection before the registration can be renewed each year. Overall, registering a salvage vehicle in VA involves some extra steps, but is a legal process with the proper salvage title and documentation.
Inspecting and Insuring a Salvage Vehicle
Virginia has strict inspection laws for vehicles with salvage titles. Before a salvage vehicle can be registered and driven legally in Virginia, it must pass a special salvage inspection by an authorized inspector (How to Insure a Car with a Rebuilt or Salvage Title). The purpose of the salvage inspection is to ensure the vehicle was properly rebuilt and is safe to drive.
Some things the inspector will look for include:
- Proper repairs to damaged components
- No existing flood damage
- Functional safety systems like airbags, seatbelts, brakes
- Proper VIN plates and numbers
After passing inspection, the vehicle can be registered and legally driven with a salvage title in Virginia. However, finding insurance for a salvage title vehicle can be challenging. Most standard insurance companies will not insure salvage vehicles due to the increased risk. Here are some tips for finding insurance (Can you insure a car with a salvage title in Virginia?):
- Shop for quotes from specialty insurers that cover salvage vehicles
- Be prepared to pay higher premiums
- Provide evidence of repairs and inspection to demonstrate the car is roadworthy
- Consider getting an appraisal to establish the vehicle’s current value
With proper inspection and the right insurance, you can legally drive a salvage title vehicle in Virginia.
Driving a Salvage Title Car Legally
In Virginia, it is legal to drive a vehicle with a salvage title, but there are some important regulations to follow.
According to the DMV, a vehicle that has been issued a salvage title cannot be operated on Virginia highways until it has been rebuilt, inspected and issued a new title (DMV, n.d.). This means you cannot legally drive a car that still has an active salvage title.
Once the salvage vehicle has been rebuilt and passes inspection by an authorized inspector, you can apply for a rebuilt title. This allows you to register, insure and legally drive the car in Virginia. However, the title will still indicate it is a rebuilt salvage vehicle (DMV.org, n.d.).
There are no restrictions on transferring or selling a vehicle with a rebuilt salvage title in Virginia. However, you must disclose that it is a rebuilt salvage vehicle to any potential buyers (DMV, n.d.).
It’s important to follow all inspection, registration and title requirements when driving a rebuilt salvage vehicle. Violations may result in fines or having the vehicle impounded.
Safety Concerns with Salvage Vehicles
Driving a salvage title vehicle can potentially put you and your passengers at risk. According to ValuePenguin, there are several safety concerns to be aware of:
Structural damage – Vehicles that have been in major collisions often have underlying structural damage that may not be visible. This can compromise the vehicle’s crash safety ratings.
Mechanical issues – Water damage from floods can cause electrical problems and rusting. Engine and transmission issues may not be immediately evident.
Airbag failure – Accident damage may prevent airbags from deploying properly in a future collision.
To inspect a salvage vehicle for safety, Capital One suggests having a mechanic do a thorough inspection, test drive it at high speeds, and check safety features like airbags, seatbelts and brakes. Consider having a body shop check the frame for alignment issues. Ensure any repaired parts were replaced with original manufacturer components. However, even with inspection, safety risks may remain.
Salvage Title Car Values
A salvage title significantly impacts the resale value of a vehicle. According to Edmunds, a salvage title can decrease a car’s value by up to 50% compared to the same make/model with a clean title (source). Kelley Blue Book recommends deducting 20-40% of the car’s Blue Book value when determining the worth of a salvage title vehicle (source). The exact decrease depends on factors like the vehicle’s condition and why it received a salvage title.
When checking the Blue Book value for a salvage title car, it’s important to search for the value of a similar vehicle in “fair” condition. Since salvage cars tend to have prior damage, their condition is usually not “good” or “excellent.” The fair value provides a more accurate baseline to deduct 20-40% from. However, the best way to determine a salvage car’s resale value is to get it appraised by a professional dealer (source). They can assess its unique condition and damage history when valuing the vehicle.
Buying Tips for Salvage Cars
When buying a salvage title car, it’s important to inspect the vehicle thoroughly and understand exactly why it was given a salvage title. Look for signs of structural damage like bent frames, misaligned body panels, and replaced welds. Carefully inspect mechanical components like the engine, transmission, suspension, electrical system, etc. Test drive the car and pay attention to any unusual sounds, vibrations, or handling issues.
Have a professional mechanic do a pre-purchase inspection. They can spot problems you may miss. Ask for repair invoices and confirm the repairs were done properly. Test all features like windows, locks, lights, A/C, radio, etc.
Negotiate a lower price since salvage vehicles are riskier and worth less. Research similar models without salvage titles to gauge value. Offer 25-40% less than the asking price. Be ready to walk away if you and the seller can’t agree on a fair price.
Only buy from a reputable dealer who discloses problems upfront. Private sellers may hide issues. Dealer cars often have proper repairs. Get promises of repairs/warranty in writing. Have a purchase agreement noting the car’s salvage status.
Check with your insurance company beforehand to make sure they will insure a salvaged vehicle. Coverage may be limited or more expensive. Understand your state’s salvage title transfer process before purchasing.
While salvage cars can be affordable, they do carry more risks. Follow these tips to make an informed decision and potentially negotiate a good deal.
Pros and Cons of Salvage Title Cars
Buying a salvage title car can offer certain advantages, but there are also some significant drawbacks to consider.
Potential Advantages of Buying a Salvage Title Car
One of the biggest potential pros of buying a salvage title car is the lower purchase price compared to similar vehicles with clean titles. Salvage vehicles typically sell for 50-80% less than their book value, according to Car and Driver. This can allow buyers on a budget to afford a nicer or newer car than they may have been able to otherwise.
If the prior damage is relatively minor and has been properly repaired, buyers may get a good deal on an otherwise solid vehicle. However, it requires extensive inspection to verify the repairs were done correctly.
For DIY mechanics, salvage cars offer an opportunity to save money by making repairs themselves rather than paying a shop. This allows skilled mechanics to potentially end up with an affordable and reliable car.
Drawbacks to Consider
The main downside of buying a salvage title car is the risk of hidden damage. Unscrupulous sellers may try to mask damage instead of fixing it properly. Issues like frame damage or electrical gremlins can be extremely difficult to identify, according to RateGenius.
Future repairs may also be more complicated and expensive on a salvage vehicle. Insurers often restrict coverage on salvage cars as well. This leaves buyers vulnerable to uncovered repair costs down the road.
Salvage cars can also be difficult or impossible to resell because most dealers won’t accept them as trade-ins. Banks frequently won’t finance them either. Their value tends to remain low even after repairs, making it a poor investment.
Overall, the risks tend to outweigh potential cost savings in many cases. Careful inspection and evaluation are essential when considering a salvage title vehicle.
## Alternatives to Buying a Salvage Title
While salvage title vehicles can sometimes be found at enticingly low prices, there are alternatives to consider if you want to avoid the potential pitfalls and safety issues associated with salvaged cars.
One option is looking for an older used car with higher mileage but a clean title. The price may be slightly higher than a comparable salvage vehicle, but you’ll have peace of mind knowing it has a verified history free of major damage. Private sellers often price older cars to sell, so negotiating and patience can pay off.
Leasing can also give you access to a lower-cost newer car with a warranty, without the long-term commitment of financing a vehicle. Down payments and monthly payments are typically lower than financing a used car.
If your budget is fixed, consider certified pre-owned (CPO) cars, which undergo inspections and come with extended warranty coverage. Or opt for a rental car company purchase, many of which are former lease returns with low mileage.
Ultimately, the extra cost of a clean title car is often worth it. The repairs, hassles, and safety risks of salvage title vehicles can quickly negate any upfront savings down the road.
