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Salvage Cars Car Insurance

How To Rebuild and Insure Your Own Salvage Car?

By Mike Richards Updated: 08/31/2017 Posted: 10/23/2015

Buying a salvage car at an auction can be a dream come true for hobbyist mechanics. At the same time, navigating the laws regulating salvage vehicles can all too easily result in this dream turning into a nightmare.

However, if you know the process for rebuilding and insuring your salvage car before you even visit the auction house, you’re already one step ahead of the game. Here’s what you need to know to have a successful salvage car reconstruction.

Laws Vary from State to State

Salvage laws are not federally regulated in the US. That means that each state can have different laws in place regarding the disposition of salvage vehicles, how they can be restored, and the process you need to follow in order to get them legally recognized as reconstructed.

There is a lot in common across the board when it comes to these salvage laws. For instance, a car with a salvage title cannot be legally driven in any state. However, in some states the laws are so strict that you can’t even restore a salvage vehicle yourself, but instead have to pay to have it done by a handful of certified auto mechanics.

Thankfully this is a rarity, but before you start any restoration project you need to go down to your local DMV or visit its website and learn exactly what rules you need to comply with before you even start reconstructing your salvage car.

After Your Car is Fixed

Another common regulation across every state is that you can’t just start driving your rebuilt salvage car once you’ve fixed all the damage. You’ve got to trade in the salvage title for one that permits you to register and insure your car legally. In order to earn a new “rebuilt salvage” title you’ll need to prove to the state that you followed its instructions.

This is routinely accomplished by filling out some paperwork, paying a fee, and getting your car inspected by a state official. These individuals will look over all the documentation you’ve collected over the course of your rebuild, including, in many case, receipts for the parts used, and then check that you didn’t use any stolen parts to fix your car.

Pass this inspection and you’ll be given a new title for your car. You’ll also be permitted to drive it around once more, once you get it registered and insured.

Insurance, the Bane of All Salvage Car Owners

It’s not a part of your state’s salvage laws, but it is mandated that you carry at least a bare minimum of personal liability and property damage (PLPD) insurance on any car you register in your state. This is as true for rebuilt salvage cars as it is for brand new ones. The only problem is that getting an insurer to cover your vehicle at a reasonable price could end up being a serious challenge.

The reason for this is that insurers know what kind of damage it takes to total a vehicle, and they’re quite suspicious of the condition of any rebuilt salvage car. Since state-sanctioned inspections don’t touch much on the safety or reliability of a rebuilt salvage car, insurers have no guarantees that you did a good job.

If you can show an insurer that your vehicle was rebuilt to a proper standard, they might be more willing to provide better coverage, like comprehensive insurance or collision coverage. This can be accomplished by submitting your car to an inspection conducted by an insurance company’s representative.

Find information on Rebuilt Title Laws for Each US State. Explore our Vehicle Auctions and find information on Buying With Us.

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