What does a salvage title mean on a used car?
Why a Car Gets a Salvage Title
Insurance companies brand a title as 'salvage' when repair costs exceed a certain percentage of the car's value—often 70-80%. This can happen after a major collision, flood, fire, or theft recovery. The exact threshold varies by state.
Once repaired and inspected, some states issue a 'rebuilt' or 'reconstructed' title. That means the car is legal to drive, but the salvage brand stays on the title history forever.
- Collision damage exceeding repair threshold
- Flood or water damage
- Theft recovery with missing parts
- Fire or vandalism damage
Pros and Cons
The main advantage is price: a salvage-title car often sells for 20-50% less than a comparable clean-title car. If you're handy and plan to keep it, it can be a bargain.
The downsides are significant. Resale value is much lower, and some lenders won't finance a salvage car. Insurance can be limited to liability only. Safety may be compromised if repairs were done poorly, and hidden damage may appear later.
Common mistakes
- Believing a rebuilt title is the same as a clean title—it still carries a permanent stigma and lower value.
- Skipping a thorough inspection because the car looks fine; hidden frame or flood damage can be dangerous.
- Assuming your insurance will cover a salvage car fully—many companies won't offer comprehensive coverage.
