What is a Salvage Title?

A salvage title is a type of vehicle branding, or a designation of what has happened to a car or truck. In all states, a vehicle can receive a salvage title if it has been substantially damaged due to weather or collisions. However, it is also possible that the vehicle may have received a salvage title because it was stolen. Keep in mind that in some states, it is also possible to “clear” a salvage title, or remove the designation.

Salvage Title Basics

Although the exact percentage varies, a vehicle’s title is changed to salvage when the cost of repairs are more than  60 to 80 percent of the current value of the vehicle. This means that a car that is worth $20,000 would require repairs of $12,000 to $16,000, while an older car worth $5,000 would need much less in order to require the title. Keep in mind that in addition to these percentages, which vary, there are also usually conditions about the vehicle’s age, as well as the total value of the car.

As an example, a vehicle worth $4,000 or less in Minnesota cannot receive a salvage title, and this is the case in several other states as well. Keep this in mind if you are considering a vehicle because of it is low cost. Some other states leave the designation up to the vehicle’s insurer, which can mean an indeterminate amount of damage can leave a car with a salvage title.

However, in addition to damage to the vehicle, if a vehicle is stolen it will also often receive a salvage title in many states. This is because many stolen vehicles are “stripped” or have many parts removed in an unsafe fashion that could make it difficult for the car to run properly again.

Can Salvage Titles Be Cleared?

The short answer is sort of. Vehicles that have salvage titles, with exceptions in states like Mississippi, will always have a record of the large amount of damage that they once had. But a salvage title can be modified to rebuilt salvage, meaning that the car sustained serious damage. But it was repaired and passed inspection in the state where the title was created.

However, because there are differences in regulations, it is possible in some states to repair the vehicle and have it pass inspection after flood damage or an accident. In that case, it may be possible to have the vehicle with a clear title, without a future buyer knowing about the damage.