What is a salvage title, and should you ever buy one?

A salvage title is issued when an insurance company determines that repairing a damaged vehicle would cost more than a set percentage of its value, commonly 70 to 90 percent depending on the state, and declares it a total loss. The damage might be from a collision, flood, fire, or theft recovery. Once repaired and inspected, the vehicle typically receives a rebuilt or reconstructed title, which permits registration and road use. The thresholds, terminology, and inspection standards vary considerably by state, and a vehicle can be retitled across state lines in ways that obscure history, a practice known as title washing.

The practical consequences are consistent enough to be predictable. Resale value typically runs 40 to 50 percent below a comparable clean-title car, many lenders will not finance them, and many insurers will not write comprehensive or collision coverage, leaving only liability. Most importantly, the inspection required for a rebuilt title generally verifies that the car is roadworthy and that parts were not stolen, not that the repair was done well, so structural repairs and airbag replacement quality can be genuinely unknown. Flood vehicles deserve particular suspicion because corrosion damage to wiring and electronics surfaces months or years later. There are legitimate cases for buying one, a low-value commuter, a parts vehicle, a car damaged cosmetically by hail, but only with an independent inspection and eyes open about resale.