A salvage title is something that is issued by a state when a vehicle is severely damaged and the costs of repair can exceed the vehicle’s value. Usually, this happens when an insurance company has deemed a vehicle covered by a policy a “total loss.” When these vehicles are salvaged, or repaired, the state issues a salvage title. Even cars that have been in floods or stolen can fall under the salvage title distinction.

How Can a Salvage Title Affect Me?

Regulations about salvage titles change from state to state. Some unscrupulous car sellers can transfer vehicles with salvaged titles over state lines, resulting in “clean” titles once the car is in a new state. A buyer does not immediately know the vehicle’s history, and runs the risk of purchasing a “lemon” vehicle. But some cars with a salvage title can be good, affordable purchases. The circumstances surrounding the salvage title affect the value and durability of a car. Was it totaled, or was it stolen for a joy ride? Sometimes, you can assess the damage to the car by the resale price: If you’re buying a $25,000 car for only $5,000, you know significant damage was done. Also remember that a car with a salvage title will be worth less at resale, and will be difficult to sell again.

Can I Insure a Car with a Salvage Title?

It can be difficult. Cars with salvage titles generally have had serious defects - structural and mechanical. They might not be reliable and could be unsafe, which an insurance company would consider a risk. Don’t assume that your policy will cover a car with a salvaged title. Ask your carrier before assuming anything.

What Should I do to Protect Myself?

No matter the scenario, someone buying a used car should use a vehicle-check service. These computerized services track a VIN (vehicle identification number) for the entire history of a car. You’ll find out when it was bought and sold, when it was serviced, and if it was in an accident or had a salvage title. Most important, you’ll be able to make an informed purchase, and drive away with peace of mind. Regulations on salvage titles vary from state to state, so check with your local department of motor vehicles to learn how salvage titles can affect you.

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