Flash Auctions
Try out our new feature. Be fast. Save Big!

The Guide to Salvage Cars and Insurance Coverage

Date: 10/21/2015 |Category: Car Insurance, Salvage Cars

The opportunities represented by a decent salvage vehicle are many and rewarding. Here’s everything you need to know about salvage cars, getting them insured, and everything in between.

What a “Salvage Car” Is

In every US state, there are laws to govern the fate of motor vehicles that have been damaged to the point where the cost of repairing the vehicle is a substantial percentage of the total value of a vehicle. In most states, this can be anywhere from 60 percent to 90 percent of the value of a car or truck. When this happens, an insurer typically buys the car off the owner as a write-off, trades in its title certificate for one with the word “salvage” branded on it, and then disposes of the vehicle.

Often, insurers sell these salvage vehicles at used car auctions. Companies and individuals can buy these cars and then do with them as they see fit – either use them for parts, or rebuild them to put them back on the road. However, restoring a salvage car to a drivable state can be hard work.

Restoring a Salvage Car

Any vehicle with a “salvage” title is illegal to drive, even if it’s still mechanically sound. This means you’ll not only have to repair the car or truck yourself (or have it repaired on your behalf), you’ll also need to show to your state’s motor vehicle division that the car is ready to be driven again. This means you’ll have to bring it to a certified inspection facility.

While each state’s laws are different, you’ll typically need to present a large number of documents to your inspecting officer. Documents like your bill of sale, your salvage title, and receipts for any replacement parts you bought for the car are likely to be included. In some states you need to provide photographic evidence of the entire reconstruction process, so make sure to check your local laws thoroughly before beginning work on your salvage car.

Insuring Your Restored Salvage Car

If you pass your inspection, your car will be given a new, “reconstructed” or “rebuilt salvage” title instead of its old one. For all intents and purposes, this new title lets you register and insure the car once more. However, when it comes time to get new insurance cover for your rebuilt salvage vehicle, your insurance company most definitely takes notice.

Rebuilt salvage cars are not usually welcome by insurance companies, as there’s no guarantee that the work done on the car was enough to make it safe to drive. This is because the state inspection is typically concerned with making sure all the parts used to repair the car weren’t stolen.

You’ll routinely be able to get a minimum level of insurance like personal liability and property damage, as it doesn’t involve insuring the vehicle against damage directly, but if you do want physical damage insurance for your rebuild salvage vehicle you’ll need to take one more step.

In many cases, an insurer may request that you submit your rebuilt salvage car to one more inspection. This one, though, is much more concerned with documenting any visible damage to your vehicle. An insurance agent will take a look at your car and may even take several photographs of the interior and the exterior to create a record of your car’s condition.

Once this is done, your insurer is usually much more comfortable offering you collision or comprehensive cover for your rebuilt salvage car.

Explore our Vehicle Auctions, as well as finding more information about How These Auctions Work.

Auto Auction Specialist Used car expert The largest salvage & insurance vehicle auction marketplace online.
Bid on over 200,000 vehicles for sale right now.
1-800-680-8010

Ready to get started?

Register a free user account and start bidding on your dream car right now!

Sign up for free

Unfortunately we are not in the office right now

Let us call you back during our business hours

Thank you!
We will contact you on:

{{cbTime}}am {{cbWeekday}}

{{phoneNumber}}

Ok, got it!
We speak your language:
English, Spanish, Portugeese and Russian
< Back
  • Auction Process
    • Do you offer live bidding?
    • What is the difference between, “auction” car, and a “buy now” car?
    • What is a Reserve Price?
    • What does the bid amount include?
    • How does the auction process work?
  • Deposits and Pre-Bidding
    • Is the security deposit refundable?
    • How do international customers make a deposit in their account?
    • How does the security deposit process work?
    • Can I cancel a bid?
    • Can I inspect vehicles prior to auction?
    • Is automatic bidding or pre-bidding available?
    • What is the total bidding amount?
    • What is a bid in active status?
    • What is a bid in pending status?
    • What is the best way to win an auction?
    • How do I search for a car available at auction?
    • How does the auction process work?
  • Post-Auction and Payments
    • What does a customer need to do to get the title to a vehicle?
    • How do I pick up the car I purchased?
    • Are there storage fees if I cannot pick up my vehicle immediately?
    • Do you Issue Temporary Plates?
    • Can I pay in cash?
    • Are there late payment penalties?
    • What are the payment terms?
    • How do I pay for an auction?
    • What if I fail to may a payment as required?
    • When is the balance due on a purchase?
    • When will I be notified of the results of the auction?
    • Bidding has ended. Is my bid the highest?
    • Why did I receive notice after bidding ended that my bid is no longer the highest?
  • Shipping and Delivery
    • How will it be mailed to me?
    • When will I receive the title?
    • Can I have the title mailed to an address/name different from the address/name on my account?
    • I have an agent working on my behalf can this person pick up my vehicle?
    • Do you offer delivery?
    • When can I pick up a car I have won at auction?
  • Understanding Salvage Titles
    • What is NMVTIS and how is it used?
    • Understanding the salvage title/rebuilt title distinction
    • What are the different types of titles a vehicle may have?
    • I received a different type of title than the one in the description. I received an equivalent title from a different state. Why?
  • User Registration
    • What are the rules regarding new customers and customers not in good standing?
    • Can I just buy one car?
    • I do not have a dealer license; can I bid or buy a car?
    • What information do I need to provide to register?
    • Do I have to pay to register?
    • Do I need to register to bid?