What Is a Salvage Title and When Do You Need One?

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Whenever your car is involved in a severe accident, you can file a claim through your insurance company. If the cost of repairing the car exceeds the current buying price, the insurance company will declare it a total loss. After that, two things that can happen:
  • Your insurance company will offer to pay for damages minus the car’s value and allow you to keep the vehicle. This is called a partial settlement.
  • Your insurance reimburses you for the full damages and keeps the car (minus any deductibles). This is a full settlement.
What does that have to do with the salvage title? Well, if you go for the partial settlement and keep the car, since that car has been declared a total loss and is significantly damaged, you are required to file for this title. 

Why You Need a Salvage Title

Whatever you want to do with the car after the serious accident will require the salvage title.
If you’re going to start a rebuilding process, you’ll need to be able to show your salvage title to a mechanic. Once this is done, there will be a few more steps to follow before the car is ready to hit the streets once again. The specifics of these steps can vary from state to state, but generally they go like this:
Pass an inspection: Your car will have to be inspected by the department of revenue, which will assess whether or not the repairs are up to par with your state’s safety and legal standards (make sure to save receipts for the parts and repairs). The inspection will have a fee, and the information would be added to the vehicle’s information number.
Get a rebuilt title: Once the inspection has been passed, you will be to apply for a rebuilt, which basically means that you would be titling and registering the car with your local county treasurer’s office. This last step also typically incurs a small fee. 
If you decide to sell your car to a junkyard or to any other place or person to be able to make some profit, you will also need the salvage title for this. That way, the buyer knows exactly what they’re getting.  

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