What is Salvage title? Car Insurance

How Do I Insure Salvage Cars in Arkansas?

By Mike Richards Updated: 04/07/2020 Posted: 10/16/2015

There are quite a few different advantages to purchasing a salvage car. You can save a great deal of money. If you buy a salvaged vehicle at auction, it will likely cost a fraction of the price you would normally pay. And, even if you do need to make repairs to it, you still will pay nowhere near full price. So, quite a few people choose to make these purchases so that they can get a better car than they would normally be able to afford. However, there are certain rules and regulations that vary by state when you buy a salvage title vehicle, especially when it comes to actually driving that car and getting it insured. If you live in Arkansas, then here are the things you need to keep in mind.

What Is a Salvaged Title Vehicle?

Let’s start by establishing what these cars are before you purchase them so that you know what you are getting into. If a vehicle has been damaged in one of many different ways such as a collision, vandalism, hail, or flooding, then the insurance company will decide whether it can be repaired or not. If the repairs will cost 75% of the vehicle value or more, than insurances companies will consider it totaled. That’s because it is more financially advantageous to replace the car altogether for the policy holder than to do the repairs themselves.

Additionally, the state of Arkansas has a specific set of laws as to when a car can be listed as salvage:

  • The damage must be at least 70% of the value of the car.
  • The car must have been flooded up to dashboard level.

In either of these situations, the vehicle is automatically listed as salvage.

Once a vehicle has been issued a salvage title, it can no longer have a “clean title” no matter what. The best that can be done is a rebuild title, which means things have been repaired in order to make sure the vehicle passes inspection and is safe for driving. Either way, purchasing a salvage vehicle can be affordable. Making repairs doesn’t usually raise the price even up to the normal cost of the car.

In Arkansas, then the title will be changed to simply list the car as “rebuilt”. In those circumstances, it is easier to purchase auto insurance for that vehicle.

Getting a Salvage Rebuilt Title

You have to follow some specific rules if you want to get a rebuilt title on a salvage car you purchased at auction or that you had when it sustained damage. To begin with, you will need to repair any damage to the car that would affect its safety or its ability to be driven regularly.

You can apply online with the OMV for application assistance. That way, you need only go through certain steps to get your car inspected. Alternatively, you can handle the process through the mail or in person at an OMV office. While you will not be able to get a specific rebuilt salvage title, what you will get is your salvage title with a salvage vehicle repair report attached. This is what you need for rebuilt status.

Insuring a Salvage Vehicle in Arkansas

You essentially have two options if you want to get a salvaged car in Arkansas. If you don’t want to do the repairs, then you are very limited. Most insurance companies will not be interested in offering coverage. And, it is all but impossible to get collision or universal coverage for the vehicle. Technically, you may be able to do this, especially if the salvage status was due to something like vandalism, but you aren’t going to find many opportunities. Usually, the best you can get is liability.

If you want further coverage on a vehicle, then you will have to get it repaired and that means going through the inspection process as mentioned earlier. Once you have gotten your car to rebuilt status, then the next step is to contact insurance agencies. They will want to see the information included in the salvage vehicle repair report. In some cases, if the damage was extensive, beyond what they feel is repairable, then some insurances companies may still be loath to offer coverage.

However, since the salvage car does have to go through inspection through the state of Arkansas, then this is good for you. If it has been repaired and it passes that inspection so that you can license the vehicle, then insurance companies will feel more comfortable offering coverage. In many cases, you may be able to even get collision or universal insurance policies. You will definitely find it much easier to get liability so that you can legally drive the car in Arkansas.

You have opportunities to purchase a salvage car if you are looking for cheap cars for sale specifically. One of the easiest would be through an online salvage auction. That way, you can look at and bid on vehicles right from the comfort of your own home instead of having to travel to the auction personally. This is a good way to get a very good price on one of the vehicles too. And, if you work with the right online auction site, then you should be able to get all of the transportation handled through the company so that you don’t have to deal with that hassle either, whether the vehicle is out of state or not.

If you are interested in purchasing a salvage car to save money, then make sure you understand the laws in Arkansas. Each state has their own rules and regulations about this, so you need to know them in order to get a tag for the vehicle and to get insurance coverage. Just remember that you will have a better chance of getting the car insured if you are willing to pay for repairs and get it inspected and improved by the state.