Vehicle Title
What is Salvage title?

What Does It Mean When a Car Has a “Clean Title” At Salvage and Clean Title Car Auctions?

By Mike Richards Updated: 05/23/2019 Posted: 10/20/2015

Any time you buy a used car, even at a clean title car auction, it comes with a history. Any car of a certain age has a certain mileage and had some services and repairs. Some vehicles have been wrecked or exposed to unusual conditions that have led to damage. Some cars also have a lien against them. This means the current owner borrowed money to pay for them and didn’t repay the total amount of the loan.

A clean title means that there are no liens against the vehicle, but it means more than that. In this article, we’ll take a look at the meanings of salvage title, clean title and totaled cars.

What is a Salvage Title?

When a vehicle suffers damage, the insurance company evaluates the cost of repairing the damage and compares it to the value of the vehicle. Sometimes the damage to the vehicle costs more to repair than its value or more than a set percentage of the value. This is what we mean when we say that a vehicle was “totaled.”

Title salvage

The insurance will only pay up to the value of the vehicle, not the amount needed to repair it. Once the owner has received payment, the vehicle becomes the property of the insurance company.

After deeming a car a total loss, the insurance company usually reports it to the local DMV. Although the process differs in some states, this usually results in the car getting a salvage title. In addition to having no liens, a vehicle with a clean title also has no salvage title.

Salvage vehicles are sold to car auctions, salvage yards, and rebuilders, depending on the type and value of the car. These vehicles are then sold at auction or salvaged for parts. The prices are low because the vehicles have a lower value than a vehicle with a clean title. Also,  the insurance company hasn’t put any money directly into the vehicle.

Salvage Title VS Unrepairable Car

Many people believe that a totaled car has suffered damage beyond repair. In reality, the salvage classification depends on the cost of repairs in comparison to the vehicle’s value. Some cars suffer so much damage that they are “unrepairable”. As such, they can only legally be sold for parts or as scrap.

A salvage vehicle is a good choice for some people, but not for everyone. These salvage cars do not have the higher prices of cars with a clean title. If you have access to cheap repairs or can do them yourself, you probably can restore the vehicle to drivable condition. Once you repair the vehicle, you may apply for a new “rebuilt” title. However, the vehicle will never have a clean title.

Further Reading

The Matter of Insurance

Getting liability insurance on a vehicle with a rebuilt title is more difficult than with a clean title. But comprehensive insurance is even more difficult to obtain. This means that you get cover for the other car in the accident but not for your vehicle.

For many drivers, the low price of a salvage vehicle makes up for the risk of losing it due to additional damage. Some people even enjoy the option of re-building their salvage vehicle as a hobby.

Advantages of Buying a Vehicle with a Clean Title

Insurance is the most important issue when considering a salvage vehicle. In many cases, the buyer must accept that if their vehicle is damaged, they will not recover their investment.

You can’t say the same of a vehicle purchased with a clean title. You will have the choice to get collision and comprehensive insurance coverage for any vehicle with a clean title. Still, buyers should realize that their insurance coverage depends on the actual value of their car and its classification. Even if you get a great buy, you will have to pay insurance premiums based on the full value.

Saving Money on a Clean Title Vehicle

Calculator and toy car

Another option is to go through a car broker. Brokers are professionals comfortable in the high-energy environment of car auctions and who understand the values of vehicles. They know how to find a vehicle that matches with the buyer’s needs. They also know how to get them a deal that will fit your budget.

When buying a used car, you should look at the title and make sure you are getting what you need. If you buy a car with a clean title, you don’t have to worry about surprises occurring down the road. Of course, if you purchase a car with a salvage title, you also want to make sure it is repairable.

All of these types of vehicles and titles have a place in the market for the right buyer. To ensure appropriate matches, the buyer should see the title or entrust the purchase to a broker. This is a good idea, especially if you don’t know how to get the car you want cheaply.

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