What does a salvage title mean?
Salvage title meanings apply to any vehicle declared a total loss by an insurance company after an accident or collision. It can be worth buying a salvage vehicle because they often cost 20%-40% less than clear title vehicles, but you may have a hard time finding auto insurance for a salvage title.
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UPDATED: Apr 29, 2022
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- Salvage title meanings apply to any vehicle that is declared a total loss by an insurance company
- No insurance company will provide coverage to salvaged vehicles
- To buy auto insurance for a salvage vehicle, the vehicle must be repaired and pass a state inspection
If your vehicle has a salvage title, that means it was declared a total loss by your insurance company after an accident or collision. Insurance companies do not insure salvage titles because salvage vehicles are not legally fit to be driven.
However, once a salvage car is repaired and inspected, it will earn a rebuilt title and be eligible for liability and full coverage auto insurance.
Is it worth buying a vehicle with a salvage title? Sometimes, yes, because a salvage car is cheaper than a new or used car. Keep reading to learn the advantages vs. disadvantages of a salvage title meaning and how to get a salvage title cleared so you can buy auto insurance for your vehicle.
If you’re looking for affordable salvage title insurance, enter your ZIP code above to start comparing auto insurance quotes from local companies for free.
What does a salvage title mean?
There are different types of vehicle title brands. The salvage title meaning applies to damaged vehicles that were declared a total loss by the insurance company. The salvage title meaning and color are meant to alert buyers and insurance companies that the vehicle was previously damaged.
This table explains the salvage title meaning and the meanings of other types of titles:
Types of Vehicle Titles
Vehicle Title Details Clean Title Salvage Title Rebuilt Title
Issuing Factors Issued for new or used vehicles with little to no damage Issued for vehicles whose damages exceed the value of the vehicle Issued for vehicles that were salvaged but have been repaired and passed an inspection
Pros No damage or repairs to deal with Usually very cheap to purchase Cheaper than a new or used car to purchase
Cons Most expensive upfront cost No insurance available, can't be driven legally, and repairs can be costly Can be driven legally but can be hard to find more than liability insurance
Color of Title Green Blue Orange
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Typically, a salvage title vehicle was involved in a major accident, or collision, and the repair costs surpassed the car’s value. Salvage titles can also apply to vehicles with flood or water damage and heavily-used taxicabs and patrol vehicles.
Can you drive a vehicle with a salvage title?
No, because salvage titles are not eligible for auto insurance. If you’re looking to buy auto insurance for salvage vehicles, you will have to make all the necessary repairs and apply for rebuilt titles.
Can you register a salvage title?
Yes, if you own a salvage vehicle, you must register it with your state. In general, you will register it through your local DMV, but each state will have a different process and registration costs.
Is a salvage title bad?
If you’re looking for a road-ready vehicle, then a salvage title isn’t in your best interest. You can’t buy insurance for a car with a salvage title, so you can’t drive that car until it’s repaired and deemed eligible for coverage.
But this doesn’t mean a salvage title is bad. Salvage titles aren’t lost causes and you may find a salvage title that isn’t too costly to repair.
Remember, a total loss means that repairs cost more than what the insurance company thinks a vehicle is worth. Your budget may be more flexible than the insurance companies’. So, it’s important to weigh your options and compare auto insurance rates before you decide to buy a salvage title car.
How do I clear a salvage title?
Clearing a salvage title requires extensive repairs and passing a state inspection. Where you live will determine how you clear a salvage title since each state has different laws regarding vehicle inspections.
Once your vehicle is repaired and passes inspection, you will have to apply for a rebuilt title and new vehicle registration with your state’s DMV. Application processes will vary by state.
For example, in Texas drivers must fill out two forms: 1) an Application for Texas Certificate of Title, and 2) a Rebuilt Vehicle Statement. Once the applications are processed, the salvage title meaning in Texas will change to “Rebuilt Salvage – Damage.” With this new title, drivers can now buy liability-only auto insurance.
To learn the specifics of how to clear a salvage title in your state, contact your local DMV.
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Which auto insurance companies cover salvage titles?
No auto insurance company will offer coverage to a salvage title vehicle. There is no such thing as salvage title insurance. Any place selling you a salvage title policy is committing auto insurance fraud.
If you need salvage title insurance, you need to repair your vehicle and apply for a rebuilt title. Insurance companies are more likely to insure a rebuilt title. The table below shows what you could pay for auto insurance with a rebuilt title:
Auto Insurance Company Liability-Only Rates Full Coverage Rates
Allstate $162 $318
American Family $114 $224
Farmers $147 $288
GEICO $91 $179
Nationwide $117 $229
Progressive $144 $283
State Farm $120 $235
USAA $82 $161
Most of the top auto insurance companies provide liability-only policies for rebuilt titles. Still, you may have difficulty finding a company willing to provide full coverage.
Is it worth buying a car with a salvage title?
Deciding to buy a car with a salvage title is nothing to walk into lightly. Salvage titles come with cheaper price tags, often 20%-40% less than a used vehicle with a clear title. Most people who buy salvage titles use them for parts.
However, no insurance company will write a policy for a salvage title, whatever the vehicle’s condition or the cost of the repairs. So, you cannot legally drive a salvage vehicle until you have the vehicle repaired and inspected for a rebuilt title.
Enter your ZIP code below if you’re ready to compare auto insurance quotes for salvage, rebuilt, and clear title vehicles. We will help you compare quotes from multiple local companies for free.
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