What is Salvage title? Car Insurance

Registering and Insuring a Car Bought In Colorado

By Mike Richards Updated: 05/22/2019 Posted: 10/16/2015

Everyone wants to buy a cheap car, and one of the best ways to do this in Colorado is to go through an online auction. You can locate a number of different types of vehicles through these auctions. Many of them are salvage titles though, which means you will not be able to drive them on the Colorado highways “as is”. Salvage titles are those vehicles that have damage that is determined to be greater than the fair market value of the vehicle. While this might be enough to make some people shy away from the vehicles, they can still be a good buy, as many in Colorado have discovered. It takes a little more work to get them on the road again, but it could still be a great buying option for you.

 What Are the Rules in Colorado?

If you find an auction that has a salvage title that interests you and you want to buy a cheap car, it’s a good idea to make sure you understand the rules and regulations of getting that vehicle roadworthy before you buy. Fortunately, it’s not too difficult to do, but you will need to go through several steps first.

Naturally, the first step is rebuilding the vehicle to the point where it is safe enough to be on the road. It’s generally a good idea to work with a garage or a mechanic that has plenty of experience when it comes to rebuilding vehicles, so you can be sure that the car or truck is truly ready to get back on the highway. Doing repairs on your own is possible, but unless you have experience in the field, it’s not always a great idea. This is one of those areas where you should defer to the professionals.

After you have repaired your vehicle, you will need to fill out a Salvage Title Statement of Fact. This form requires that you provide information on how you went about getting the repair, as well as the parts you used to bring the vehicle back into shape. On the salvage title that you get when you buy a cheap car through a salvage auction, you will need to sign and verify that the vehicle is roadworthy again. The vehicle will also need to have the words Rebuilt from Salvage stamped onto it – they need to be at least a quarter inch high. Most of the drivers in the state will have these stamped onto the area near where the door connects to the vehicle.

The current price for an inspection of the vehicle is $20. You will also need to have a police officer complete the Verification of Vehicle VIN. This ensures that the vehicle, as well as any parts used in the reconstruction, is not stolen. Once you have all of the forms and inspection, you can take them to the title and registration office to finish the application.

After completing this, they will issue you with a new title that has the same words stamped onto the vehicle, Rebuilt from Salvage, on it. If you ever decide that you want to sell this vehicle, you will need to fill out a special form called the Rebuilt from Salvage Disclosure Form. This is to ensure that any new buyers for the vehicle know that they are buying a car or truck that has been rebuilt.

 Getting Your Insurance

You will also need to have insurance when you buy a cheap car and have it rebuilt. Many people worry that they will not find any insurance companies that are willing to insure their vehicle. This is not entirely true, but in some cases, it can be problematic. You will need to have liability insurance at least if you want to drive on the roads in Colorado. Fortunately, most of the insurance companies will have no issue providing this insurance. The coverage is for damages that you cause while in your vehicle, and it does not actually cover damage to your car.

When it comes to getting higher level insurance though, that’s where things can be a bit more complex. Many of the insurers have trouble trying to determine the value of your vehicle, so getting comprehensive and collision coverage through some companies is simply impossible. You will find that some companies, Progressive being one, can offer this type of coverage. It’s in your best interest to start talking with various insurance companies about their policies regarding these vehicles even before you look to buy cheap cars through salvage auctions. This way, you will know where you can turn if you ultimately decide you want to have more than just liability coverage.

 You Can Make the Most of Buying Cheap Cars at Auction

When you buy a cheap car that has a salvage title, you can see that it will require some added work on your part if you hope to get it on the road. However, since you can save so much money when buying the vehicle, the additional repairs and fees for inspection could still be within your budget. It’s always a good idea to make sure you look into the history of the cars you are considering at auction. Before you buy the cheap car, make sure you understand the type and extent of the repairs needed to get it on the road again, and see whether it all lines up with your budget. Salvage vehicles can still be a great way to buy vehicle in Colorado, especially when you don’t want to overspend. Just be prepared for some additional paperwork.