Salvage cars are subject to a specific set of laws that govern what can be done with them. While these laws are different from state to state – making it sometimes difficult to discuss them in general – there are enough common aspects to these laws that individuals or companies looking into buying and restoring a salvage car can be sure of at least a few things.
How a Car Gets Classified as Salvage
Sometimes it’s not as simple as a car getting “totaled” by an insurance company. In fact, while a car can indeed suffer so much damage in an accident that the cost to repair it meets or exceeds the entire value of the car itself, insurers are permitted by state law to write off these cars if this damage rises to a certain threshold.
In many states, this is around 70 to 75 percent of the car’s value, but this isn’t written in stone. This threshold can go as high as 90 percent or as low as 60 percent, depending on the state.
Once this threshold is met, an insurer can write off the car and take possession of it if the owner agrees. At this point, state law usually requires the insurer to submit the car’s original title to the state’s department of motor vehicles in exchange for a salvage-branded title.
Cars with such title certificates are illegal to drive, regardless of whether they’re still mechanically capable of it. Since no one wants a car that can’t be driven, insurers tend to try to sell these cars at auction.
How Salvage Cars Get Certified as Rebuilt
There are different rules for when a salvage car is bought at auction by someone who wants to restore it and get it back on the road. In most states, you can restore a salvage car on your own. However, in a few states a salvage vehicle needs to be rebuilt by a state-sanctioned mechanic.
Otherwise, you’re free to repair the vehicle at your own pace and using whichever parts you like. However, before you begin your repair work, check with your state’s department of motor vehicles, as they may require you to document the process through pictures.
Once your repairs are done, you’ll have to prove to the state that the car has been repaired. This usually takes place in the form of an inspection performed by an official from the DMV or the local state police precinct. You’ll have to bring your rebuilt car, all the paperwork for your car like your salvage title and your bill of sale from the auction you bought it from, and then the receipts for any and all parts you bought to use in your reconstruction.
If your state requires photographic documentation of your repair process, you’ll also be required to submit it at this point as well. If you pass this inspection, which is mostly to see if the parts you used in your reconstruction were obtained legally, you’ll be given a new title for your vehicle – one that is branded “rebuilt salvage”. Cars with this title are eligible to be registered once more.
The Final Step
While a car with a rebuilt salvage title can be registered at your state’s DMV, you also need insurance on it as well.
This can be difficult. You’ll have to hunt around for one that will offer you the minimum required coverage for your state, which is usually personal liability and property damage coverage, before you can finally register your car and begin driving it again.
It is possible to get physical damage coverage such as collision or comprehensive insurance as well, though this will involve some extra work. You will need to prove the vehicle is in a good enough condition, and this usually entails submitting to an inspection performed by the insurance company. Premiums, however, may still be high.