What does a salvage title mean?

5 minute read Published on Jan 14, 2024 by BrokerLink Communications

Miniature car on coin stack

If you’re thinking of buying a used car, it's likely that you've come across the term salvage title or junk title when searching through listings for motor vehicles online. While it's a term that is used often, not all motorists understand the meaning behind salvage title cars, which is why the team at BrokerLink is here to help clarify. To learn more, keep reading!

How does a car get a salvage or rebuilt title?

When an automobile sustains substantial damage such as collision damage, and the cost of repairs exceeds its market worth, the vehicle is given a salvage title. After the insurance company states that it is a total loss, the car is given a salvage title. Should the owner pursue repairs and the vehicle pass an inspection, the title is changed to a rebuilt title vehicle status. Note that rebuilt vehicles may be more difficult to insure, get a car loan, and more.

Tips for buying salvage title cars

If you’re thinking about buying a salvage title car, ensure you do the following:

  • Have a mechanic conduct a comprehensive inspection
  • Make sure you obtain a detailed vehicle history report
  • Note any repairs that need to be done and the repair cost
  • Ask yourself or your insurance broker: What documents do I need for car insurance? Make sure you have the correct ones needed to insure this type of damaged vehicle
  • Bargain for a lower price, given the amount of damage

Only proceed with buying a salvage total car sale if you are comfortable with the vehicle's condition and the car's history

Getting insurance with a salvage or rebuilt title

To insure a salvage or rebuilt vehicle, you need to do the following:

1. Maintain a thorough record of repairs

To prove the car is road ready despite its rebuilt vehicle status, keep thorough records of the repairs made by a repair facility as only a repaired vehicle will pass an inspection.

2. Comprehensive inspection

Assure the insurer of the vehicle's safety by presenting proof of a comprehensive safety inspection and show proof of a passed safety inspection.

3. Professional car appraisal

To find out the reconstructed car's current worth, get an expert appraisal for the new car's title.

4. Compare prices

Get quotations for auto insurance from several companies because prices and options for coverage could differ.

5. Preserve previous records

Keeping old car insurance documents can help with coverage determination, application process facilitation, and vehicle history explanation to prospective insurers.

The signs of a salvage title car

Recognizing particular signs that a car has sustained significant damage—often to the point where an insurance company declares it a total loss—is essential for determining a salvage title vehicle. So, what should you consider when buying a used vehicle?

  • The title designation
  • The vehicle history report
  • Inspection confirmations
  • Inconsistencies in the vehicle identification number (VIN) and other documentation
  • Abnormal vehicle pricing
  • Car seller transparency
  • Poorly executed car repairs
  • Unusual wear and tear on the car

Before buying a used car, make sure you have a trusted mechanic conduct a thorough inspection and consider other vehicles before moving ahead.

Mistakes to avoid when buying insurance for your used car

Did you just purchase a new vehicle that is considered a used car or salvaged vehicle? Here are some mistakes to avoid when buying insurance moving forward:

  • Not comparing prices
  • Ignoring your needs
  • Ignoring provider reputation
  • Ignoring deductibles
  • Forgetting your insurance coverage expiration date
  • Skipping over extended coverage like comprehensive coverage

Contact BrokerLink today

Whether you have questions about car insurance, are looking to renew your coverage, thinking about purchasing a salvage vehicle, get vehicle history report, or need to file a claim, the experienced team at BrokerLink is here to help. You can reach us over the phone, via email, or by visiting one of us in person at one of our many locations across Canada.

BrokerLink is also pleased to offer car insurance quotes online for free using our convenient quote tool. Contact the team at BrokerLink today!

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What is the salvage value of a car?

An automobile's estimated value in its present damaged or wrecked state is known as its salvage value. It stands for the car's remaining worth following an accident or damage from another event. Insurance providers frequently evaluate the vehicle's salvage value to decide whether it would be more economical to restore it or declare it a total loss. The extent of damage, the market demand for salvage parts, and the general state of the vehicle following the occurrence are some of the variables that may affect the final value calculation.

Does a rebuilt title affect insurance?

Yes, a car insurance policy for a car may be greatly impacted by a rebuilt title. Because a rebuilt title typically has a history of major damage like flood damage, or total loss, an insurance company tends to see these vehicles as higher risk. Because of this, rates may be greater, and certain car insurance companies may be less willing to provide types of auto insurance to these cars. It can also be necessary to pass further inspections and provide thorough documentation of the repairs in order to get auto insurance for a rebuilt title car.

Is it a good idea to buy a car with a salvage title?

In truth, purchasing a new car with a salvage certificate title despite it being a good deal from a private party can come with significant risks. A car that has sustained serious damage—often as a result of an auto accident, flood damage, fire damage, or theft recovery—is given a salvage or junk title.

These kinds of cars may be less expensive, but their safety and resale value may be compromised by unreported problems. If you do opt to purchase a salvage vehicle, proceed with extreme caution or opt to buy cars with a clean title as a new car will be more reliable.

Can you insure a salvage title vehicle?

According to the Insurance Bureau of Canada, you cannot purchase car insurance or operate or register a vehicle with a salvage title. You can, however, repair the car and have it inspected. Once the vehicle passes the inspection and is deemed safe to operate, it will receive a rebuilt title, enabling you to purchase insurance and drive it on a public road.

What is the difference between a title and registration?

As a vehicle owner, you may have wondered what the difference is between a title vs registration? Simply put, the title is a legal document proving ownership, detailing the vehicle's history and any liens. It includes the owner's name and the vehicle's identification number.

In contrast, a registration is a government-issued document that permits a vehicle to be legally driven on public roads. The registration guarantees that the car satisfies current regulations for operation within a particular jurisdiction, whereas the title proves ownership. Both paperwork is required for a car to be owned legally and completely.

If you have any questions, contact one of our local branches.