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What Causes a Vehicle to have Salvage Title?

  • By Ryan Skidmore

  1. Totaled. When a vehicle has been damaged and the cost of repair will exceed a high percentage of its overall value, the insuring company will label it a total loss. (claims journal news) The percentage can vary depending on state. An older car, with a low market value, can be totaled from a relative minor accident.
  2. Stolen and Recovered. A car is stolen in the dead of night. The owner starts making phone calls in the morning, after an unfortunate discovery. The police start their search. The insurance company starts a claim. A very typical scenario. Once the insurance company has paid out for this vehicle, if and when it’s recovered the delightful label Salvage shall grace the title. (how does a car become salvage) Many stolen cars are recovered quickly, days or weeks, however some may be found months or years later.
  3. Natural Disasters. In a previous blog, we outlined how to avoid purchasing a vehicle damaged by a hurricane, but other types of natural disasters can severely damage vehicles. Earthquakes, tornadoes, and even hail can all damage a vehicle to the point of a salvage title label. (what-is-a-salvage-title-vehicle)
  4. Significant Aftermarket Modification. If an engine, floor pan, or cowling has been replaced with a non-OEM equivalent, the vehicle may be considered salvage title. (8-reasons-a-car-might-have-a-salvage-title) Many insurers do not like assuming the risk accompanying modified cars because the work may have been done by an amateur mechanic and because of the other risks that come with a car modified to travel at excessive speeds. (10-reasons-car-salvage-title)
  5. Kit Cars. When many components from assorted vehicles are combined to resemble a classic car, like a Porsche or a Shelby Cobra, a kit car is born. Again, insurers aren’t too keen on assuming the risks of a high-performance car that was possibly built by one or several amateurs. (10-reasons-car-salvage-title)
  6. Antique or Restored Cars. Antique/Restored cars capture everything insurance companies fear. Equipment past its engineered life span, decades or even a century, operating in conditions beyond its original scope, IE accelerating to and maintaining modern freeway speed, modified or “fixed” by amateurs. Antique cars may have been sitting in a barn or a field for many years, essentially age and decay might have made their major components unsafe. (10-reasons-car-salvage-title)
  7. Not retitled. The vehicle may have been sufficiently repaired and is safe to operate, but the owner has not had it inspected and retitled to a “rebuilt” or “repairable” label. (10-reasons-car-salvage-title) While officially, a retitled vehicle should be higher quality than a salvage title. The retitling inspection process is not perfect and purchasing a retitled vehicle may still be a gamble. (10-reasons-car-salvage-title)


In Conclusion It is strongly recommended to always look at the title of the vehicles before finalizing a purchase.  The more information you have around a vehicle the more informed decision you can make.  After the purchase the same concept applies of having information around the vehicle you are operating.  Thankfully, a fleet management solution can give you relevant information around your vehicles that can help you in making decisions and also in minimizing vehicle risks.  It is also strongly recommended that you implement a fleet management solution to keep an eye on your fleet.  This solution will maximize your operations, minimize your risks, and overall generate higher profits for your business.

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