Salvage Title Defined (2024)

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 title to your car is proof that you own it. As long as it’s in your name, your state DMV recognizes that the car belongs to you. Usually, you get a clean title when you buy a car, especially if it’s a new vehicle. However, there are other types of titles to look out for if you’re on the hunt for a new vehicle.

Salvage and rebuilt titles are issued to cars that have sustained enough damage that they had to be declared a total loss. Salvage titles let potential buyers know that repairs will have to be made to the vehicle before driving it or putting a liability auto insurance policy on it.

The salvage title meaning applies to damaged vehicles that were declared a total loss by the insurance company. A salvage car meaning is a vehicle that an insurance company declared totaled because the cost to repair it outweighed its total value. If a salvage title car is repaired and inspected, it will be issued a rebuilt title.

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

Cars can be declared a total loss for a variety of reasons. The most obvious example that comes to mind is a car accident, but salvaged status can also come from floods, fire, vandalism, and theft. In fact, it doesn’t matter how a car is damaged. As long as repairs cost too much, the vehicle will become salvaged.

What criteria do insurance companies use to total a car? It depends on the company, but it’s usually when repairs cost more than a large percentage of the car’s worth.

Most companies set the damage threshold between 75% and 90% of the car’s total value. What do auto insurance companies do with totaled cars? Once a car has crossed that threshold, the insurance provider sells the vehicle to mechanics or auction sites. If your car has been declared totaled, you can keep your vehicle and try to repair it on your own time.

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. For more, see our article Vehicle Registration Fees by State.

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. A salvage vehicle is not suited for registration.

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.

Can you fix a salvaged car?

It’s not always possible, but you can sometimes repair a salvaged car. You can tell a salvaged car has been adequately repaired when it has a rebuilt title. Laws vary by state, but a salvaged car usually has to pass a rigorous examination before it’s eligible for a rebuilt title.

Before you buy a car with a salvage or rebuilt title, make sure to check your state’s laws. For example, what does a salvage title mean in Texas? Regarding insuring salvage title cars in Texas, it’s easier for a salvage title to get a rebuilt title in Texas than in California. Once a salvaged car has passed an examination and receives a rebuilt title, you can safely and legally drive it on the street again.

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 salvaged 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.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

Can you get salvage title insurance?

Since it’s illegal to drive a salvage car, you won’t find a reputable insurance provider that will offer you a policy. However, rebuilt titles are street-legal. Most insurance companies will work with a rebuilt title (though there are a few exceptions). Insurance companies that sell to rebuilt car owners are usually not willing to give you more than liability coverage.

Unfortunately, insurance for vehicles with rebuilt titles costs more than cars with clean titles. Insurance companies consider rebuilt cars riskier because there could be underlying damage that no one knows about.

Since rebuilt cars lose up to 20% of their value, you’ll also receive a small payout if you ever need to make a claim. Your rebuilt car isn’t worth as much as the same model with a clean title. Your insurance company wants to make sure it isn’t spending too much money on a rebuilt car.

Can you get full coverage on a rebuilt title?

Finding full coverage on a rebuilt title is more challenging than liability-only, but it can be done.

It’s challenging to buy full coverage for a rebuilt title because it’s hard to determine the car’s value. Your provider will have difficulty determining what damage was already present if you ever need to make a claim. Even cars that are certified safe to drive after a thorough mechanic exam could have undiscovered damage.

Undiscovered damage usually shows up down the road when you least expect it. This danger is why insurance companies are hesitant to fully insure rebuilt cars. Insurance companies assume that a rebuilt car is more likely to make a claim.

You need a minimum amount of liability coverage in most states, and you can find that. It’s full coverage that can be tricky.

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.

What is the best insurance for rebuilt titles?

Even though rebuilt titles are legal to drive, some insurance companies won’t cover them. If you already have an insurance policy, you can ask your agent if your rebuilt car can be added to it. If you don’t have insurance (or they won’t cover your new car), consider the following companies:

• State Farm
• Allstate
• Geico (additional inspections are required before your insurance goes into effect)
• MetLife (liability only)
• Farmers
• Progressive (full coverage offered for specific models)

Most companies have specific requirements that you’ll have to meet before they sell you coverage for your rebuilt car. You’ll probably face limitations on your policy as well. It’s vital that you compare insurance quotes to get the best deal possible.

Read more: 9 Best Auto Insurance Companies That Cover Salvage Titles

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption

How do you get insurance for rebuilt titles?

Getting insurance on a rebuilt title might sound confusing, but the process doesn’t need to be stressful. Rebuilt cars require more work to get them street-legal, but the effort will be well worth it after you can drive your car.

Take the following steps to secure insurance for your rebuilt car:

• Make sure you have the correct title. If your car has a salvage title, you can’t drive it, and insurance companies won’t insure it. Save yourself a headache and make sure you have the right title before looking at insurance.
• Get a certified mechanic’s statement. This statement assures your insurance company that a mechanic has gone over the entire car looking for potential problems.
• Shop for coverage. Normally, you’d consider what type of coverage you want on your car. Most companies only offer liability, so you’ll have to do a little searching to find a company that will give you more than that.
• Compare quotes. It’s always important to compare quotes when you’re looking for new insurance, and this is especially true when you have a rebuilt car. Prices tend to be higher on rebuilt cars, this step can help you save money.

These four steps are the basis for getting the best insurance policy to protect your new car. When you have an idea of what insurance company you want to buy from, one of their agents can help you make the most of your 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. For more details, read our article Should I buy a car that was totaled?

Now that you can answer, “What does salvage mean?” you should be ready to find insurance if you plan on fixing a salvage car. Enter your ZIP code into our free tool to see what quotes might look like for you.

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

 Secured with SHA-256 Encryption