Photo: The News Wheel
The prevailing legal document that identifies important information and ownership of a car is a called a vehicle title. If a vehicle undergoes severe damage, the title will receive special branding to record that. This is how a salvage title works.
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What is a salvage title and how does it work?
Most U.S. states will brand a vehicle’s title as “salvage” based on the estimated cost of repair following severe damages. When an insurance company calculates the cost of repair to be around 60-75 percent (or higher) of the car’s current value, the insurer won’t want to mess with repairs and will declare the vehicle a “total loss.”
The vehicle owner can take the insurance payout for the value of the vehicle, but that doesn’t mean they’re obligated to buy a new car. They can keep the damaged car and keep using it — but that destruction needs to go on its record via a branded vehicle title.
If the owner decides to keep driving the car after taking the payout, they must designate that car a “salvage.”
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Just because a car has been declared a total loss doesn’t mean it’s non-operable. Widespread but minor damage like hail divots can require a pricey new body, but the machinery underneath can still function fine. And if you’re ever able to repair the car and bring it back to operable status, you can file for a rebuilt title.
A salvage title doesn’t mean a car is total junk (that’s an “irreparable” title), but its value is greatly diminished and it could possess underlying problems— so be careful if you buy a salvage car thinking it’s a great deal.
Source: The Balance
The News Wheel is a digital auto magazine providing readers with a fresh perspective on the latest car news. We’re located in the heart of America (Dayton, Ohio) and our goal is to deliver an entertaining and informative perspective on what’s trending in the automotive world. See more articles from The News Wheel.
