What is Salvage title? Used Cars

A Helpful Guide to Understanding What Car Titles Are

By Odet Garcia Updated: 03/15/2021 Posted: 05/19/2020

Car titles are documents issued by each state’s Department of Motor Vehicles (DMV). This document indicates all the ownership information about the vehicle. The previous owner’s information, car mileage, and car’s condition are included in the certificate of title. The current title needs to be transferred to the new owner every time that the vehicle is sold. Then, the state issues a new car title with the updated information. 

It is fundamental that the car buyer has a solid knowledge of the title certificate. This needs to be a key part of the buyer’s research, in order to avoid problems with the car in the future. There are different types of car titles that are issued. This, according to the car’s condition and damage. We will cover all of this in this article. 

Types of Car Titles

The car title will contain all the additional information you need to know about the car. Keep in mind that the VIN (Vehicle Identification Number) that is on the car title must match the VIN on the vehicle. Other information included in the car title is mileage, previous owners, year, make, and model. If the vehicle was involved in an accident, this will also be in the title. 

There are four basic classifications for car titles. These classifications are a type of “brand” that labels the vehicle based on the damage it has. Usually, buyers will always look for cars with clean titles. However, buying a car with a salvage title is not as bad as it may seem.

Further Reading

  1. Simple Guide to Buying a Motorcycle and Getting an Insurance Quote 
  2. Buying the Best Used Honda Car for Sale 
  3. Everything You Need to Know about Buying Used Cars 
  4. How to Buy a Salvage Car From an Online Car Auction 

Clean Title

Every new car is issued with a clean title. A clean title means that the car hasn’t received any type of damage. Hence, it is ideal to buy a used car with a clean title. However, this doesn’t mean that you should only buy a used car with a clean title.

Clear Title

More often than not, clear titles are confused with clean titles. But they are not the same. A clear title indicates that the current owner does not have any financial responsibility with a lienholder, being a third party lender or credit company. This means that no other party can claim ownership of the vehicle.

Salvage Title

A salvage vehicle title is issued to a vehicle that has major damage. Usually, cars that have a salvage title were involved in an accident. Insurance companies then assess the damages and declare the vehicle as a total loss. This happens when damages in the car are anywhere between 75 and 90 percent of its value. 

Some car buyers avoid buying used cars with salvage titles. However, it is not as bad an idea as they think. Salvage title cars are actually a very good option for buyers who have mechanical knowledge and are car savvy. Some of these cars need some repairs and can ride again in great conditions.

Rebuilt Title

On the other hand, a rebuilt title is issued to every motor vehicle that is rebuilt and repaired after having a salvage title. A vehicle that has a rebuilt title has had extensive damage in the past. After it was rebuilt, the state inspects the vehicle and decides if it is issued a new title that is not salvage. 

Keep in mind that if you don’t have solid car knowledge it is not ideal that you buy a rebuilt title car. These cars may still need some repairs in the future, and if you’re not car savvy this may cost you money. However, if you are car savvy they may be a great option for you to buy.

Where to Look for the Car Title

Looking for the car title is key when buying a used car. The car title is what will let you have a clear knowledge on the cost of ownership of the vehicle you will purchase. This is why it’s so important to take a look at the vehicle’s history report. In this report you’ll find the car title and all the information about the vehicle.