What is a Salvage Title Vehicle?

Consumers looking to buy a used car have numerous choices, including at dealership used car lots, retail stores (like CarMax) and online (sites like Craigslist, eBay and Instamotor). Buying a used car online has never been easier.

Every car buyer wants to know if the car has a "clean" title. When shopping on sites like Craigslist, it's not guaranteed that the vehicle has a "clean" title. While vehicles listed on Instamotor could have a salvage title, they still go through a comprehensive background check. Instamotor rejects about 50-percent of all vehicles submitted. These vehicles most often end up on sites that don't require VIN/vehicle checks.

What is 'Salvage'?

The CA Department of Motor Vehicles defines a salvaged vehicle as one that has been either totally destroyed or damaged (accident, stolen, or weather) beyond what the insurance company is willing to pay to fix it. In these cases the insurance company pays the owner, usually the pre-accident value of the vehicle.

Salvage vehicles are often sold to wrecking yards for scraps and parts. The ones that are repaired can have many issues down the line with reliability and the possibility of issues with the repairs.

How does a salvage vehicle end up for sale?

After an insurance company pays the vehicle owner, the car becomes the property of the insurance company. It registers the vehicle with the DMV as salvage and receives the salvage certificate. Next, the vehicle will head to the salvage yard where it will be auctioned off. Most purchase the vehicles for parts, but some buy with the intention to fix it and resell it.

After buying a salvage car the owner can't legally register it with the DMV until it passes a set of inspections with a DMV employee or the California Highway Patrol. If the car doesn't pass it won't be registered.

When a title is "white-washed"

Titles can be "white-washed" by scammers, which means they illegally alter vehicle documents to get the salvage title brand removed. Often these cars are moved around to other states and are sold to unsuspecting consumers. NICB offers a free VIN check, where car buyers can see whether a vehicle is salvaged.

If you're buying a salvage vehicle you should be aware that it carries that title. Many fraudsters are trying to make a quick buck, which ends up costing you as the consumer more money down the road.