Salvage Title: Auto Insurance Explained [2024]

If you’re looking to buy a used car, you should understand the salvage title meaning and how it affects auto insurance. Sometimes you will find more affordable cars that have no title or salvage titles.

Nobody wants to invest in a car they can’t use. But if you know how to fix a car, and don’t mind the investment in time and parts, a salvage title car might be a good choice. One issue you can expect when buying a car with a salvage title is finding insurance.

Keep scrolling to learn more about the salvage title meaning and overview or enter your ZIP code above to get free quotes from the top auto insurance companies near you.

What is a salvage title?

A salvage title is an indicator that a vehicle has been declared a total loss due to extensive damage. A salvage title is given depending on the original value of the car and the damage that was done.

For example, a $50,000 SUV with $10,000 in damage wouldn’t be declared a total loss, however, a $7,000 sedan with an equal amount of damage would. A handful of title classifications that you could see with a used car include:

• Clean title
• No title
• Salvage title
• Rebuilt title

In a perfect world, you would get a great deal on a car with a clean title. This simply means the vehicle hasn’t been involved in any major accidents or had any major repairs. But a clean title doesn’t necessarily mean the car is in perfect condition.

Buying a car with no title can be a risky investment. In short, this means that there’s no proof of ownership of the car. Many states won’t allow you to register a vehicle without a title.

Lastly, a rebuilt title is essentially an advancement of a salvage title. Vehicles with a rebuilt title have usually been declared a total loss but have been repaired or rebuilt to be deemed operable again.

To put it simply, a vehicle with a salvage title may be operable but hasn’t been entirely restored, whereas a vehicle with a rebuilt title has been repaired significantly.

There are some more specific classifications of salvage titles as well. For example, the salvage title meaning in Texas can vary, according to the Texas DMV.

In Texas, cars with a salvage title are subclassified depending on whether they were damaged, stolen, abandoned, or impounded by law enforcement.

Read more:

• Best Auto Insurance for Used Cars
• Top Salvage Title Auto Insurance Provider

Is it worth buying a car with a salvage title?

In some cases, it can be worthwhile to invest in a car with a salvage title. If you want to buy a turn-key vehicle for a cheap price and without any setbacks, a car with a salvage title might not be the best investment.

Many experts suggest that salvage title cars can sell for up to 40% less than the same cars with a clean title.

Buying a salvage title car is a worthwhile investment for people who really know what they are doing. A mechanic or handyman who knows how to repair a salvage title car could get a decent ride for a small investment.

You could find yourself doing a lot of work and testing to truly understand the extent of the damage in a salvage car. In that case, it’s better to avoid them unless you know how to fix the car and how much the needed parts would cost.

Another good reason to buy a salvage title car is if it has usable parts. Whether you’re using the parts to fix your vehicle, or selling them to get a return on your investment, sometimes salvage title cars are cheaper alternatives for parts.

Lastly, if you have an emotional attachment to a specific make or model of car, and want to fix up a classic, salvage title cars would most likely be the cheapest route to go.

Why is it bad to buy a salvage title car?

Buying a salvage title car can be a risky investment for multiple reasons. These cars can be hazardous both directly and indirectly, but how? Some of the key concerns are:

• Insurability
• Vehicle safety
• Reliability
• Limited value
• Time-consuming
• Seller risk

Some of these concerns can go hand in hand. For example, a lack of insurability can also be time consuming. Nobody wants to spend hours calling different auto insurance companies trying to find someone who will insure their car.

Does a salvage car affect insurance? It can in some cases, but it depends on the nature of the title classification. You can typically find insurance, but it might take some work or cost more money.

Salvage title cars are hard to insure because the value isn’t as clear. Speaking of value, you can’t expect to resale your car for much more than what you paid for it.

Of utmost importance is the overall safety of the car. If the car was in a major wreck, there could be hidden damage to the suspension, axles, or other parts of the car that could put you in danger if they malfunction.

Understanding the Salvage Title Meaning: The Bottom Line

Overall, salvage title cars are typically not good investments. However, if you know how to fix a car or have an emotional attachment to a specific make or model of a car, it might be a good investment for you.

By now, you should know enough about the salvage title meaning to know whether or not it’s worthwhile for you to buy a salvaged car.

Before you go, get free quotes from top insurers near you by entering your ZIP code below.