What is Salvage title?

Car Titles 101: Be Prepared for Your First Salvage Dealer Auction

By Mike Richards Updated: 06/21/2022 Posted: 05/23/2017

In a salvage dealer auction, you will see many cars declared unworthy by insurance companies.

This results in the classification “salvage” being added to the title. This happens after some type of accident. But doesn’t always mean the car had been in a highway pileup.

There are different types of salvage titles to note to gauge the value of a car at auction.


Flood Damage

In some states, cars with flood damage will be categorized differently than salvage cars. While others lump these two things together. In either case, the vehicle has been extensively damaged by flooding. It is now inoperable or not worth fixing due to major issues. This very likely includes electrical damage, which can be very pricey to fix if you aren’t sure where the problem lies.


Hail Damage

Hail is a common problem that used car buyers expect to see at a salvage dealer auction. There are some states and insurance companies that have very exact definitions on what qualifies as significant hail damage, while others simply consider the price of restoration.


Theft Recovery

In some cases, a vehicle that has been stolen can be declared salvage. Here’s how that happens: After a certain waiting period, the insurance company will pay out to the owner for the stolen vehicle. If the vehicle then shows up again, it no longer belongs to the owner, but the insurance company. They need to recoup their money, and if they are operated in Arizona, Florida, Georgia, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oklahoma, or Oregon, they’ll have to issue a salvage title to do so.


Repairable After Damage

The most common type of title you’ll see at a salvage dealer auction is “repairable after damage”. This means that the car was involved in a collision, had fire damage, or was damaged in some other way, to the point that it could no longer be driven. However, it was still able to be repaired – it just wasn’t economically sound for the insurance company to do so. Instead, they paid a smaller amount to reimburse the owner, and sold the car off as salvage. If the car can’t be repaired, it is “totaled” by the insurance company instead.


Knowledge Helps You Make Better Deals

Now that you know all the types of salvage titles you might see at a salvage dealer auction, you’ll be more prepared to make great deals. In general, stolen vehicles, minor hail damage, and even “repairable after damage” cars can make great deals. Be careful with flood or fire damage vehicles; those electrical problems can be tough to fix and maintain your profit margin. Finding great deals on salvage cars is easy when you’re able to shop at your own convenience online. Explore our vehicle Auctions, as well as finding more information about how these auctions work.