Differences Between Previous Damage Titles and Salvage Titles

What’s the difference between a previous damage or rebuilt title and a salvage title? A previous salvage title means a car is once again road-worthy and can be driven legally.

If you’re asking that question, you’ve probably been to an auto auction or searched for used cars in an automotive sales periodical.

It’s not uncommon to have confusion between the two vehicle titles, especially among average drivers and potential buyers who don’t normally deal with these kinds of cars.

All motor vehicles in the United States are required to have some certificate of title documentation. This vehicle identification document proves ownership of the vehicle. It’s also transferable from one vehicle owner to the next.

A title also contains information on possible lien holders — those who hold a financial interest in the motor vehicle due to providing a loan or other assistance to the previous owner towards its purchase.

It’s possible to get affordable salvage title car insurance. Shop around to find cheap car insurance, no matter the status of your title.

Enter your ZIP to compare online salvage title car insurance quotes in your area, whether you have a clean title, salvage title, or previous damage title.

What are salvage title cars vs. rebuilt titles?

What are the kinds of car titles? There are several types of titles, although they sometimes are called different names. The main vehicle title types are clean, salvage, and rebuilt titles.

What does it mean to have a clean title? This simply means that the vehicle has never been declared a salvage or total loss.

What does a “salvage title” or “salvage certificate” mean? What is the difference between salvage and rebuilt title or previous damage title?

In both cases, the car in question has received some damage significant enough that the car insurance company declared it a total loss.

In other words, it was less expensive for the insurance company to replace the vehicle than to have it repaired. Most commonly, this sort of extensive damage is incurred during an accident.

According to Edmunds, a vehicle is usually declared a total loss if the damage is around 75% or more of the car’s worth. However, it’s important to note that each state will determine total loss differently.

What does it mean when a car has a salvage title?

If you’re buying a damaged car that’s had little or no repair work done to it, it will have a salvage title. This doesn’t necessarily mean the car cannot be repaired. It just means that no repair work has been done.

So, what is the problem with cars with salvage titles? The main problem is usually the extent and type of damage done to the motor vehicle. Some damages, like flood damage or extensive frame damage, will be costly to repair and can be dangerous if the repairs aren’t done correctly. Instead of dealing with the high cost of repair, the vehicle will be sold by the registered owner as-is.

What does prior salvage title mean?

When a salvage car is rebuilt to the extent that it can be put back on the road, it is then given a previous damage title. In some states, these documents are known as a rebuilt car title or a prior salvage title. Check with your department of motor vehicles to see what the salvage title laws are in your state. (For more information, read our “Rebuilt Car Title: Explained Simply“).

How does a previous damage title or a salvage title affect car insurance coverage?

The question of insurance for a salvaged vehicle or rebuilt cars is an important one. Having a salvage title vs. a clean title means you’ll have some hurdles to cross, as it’s impossible to carry a traditional insurance policy on a damaged car.

Because even the best car insurance companies have no way of knowing how severe the damage was, the value of the vehicle is automatically considered to be significantly less than that of a similar, undamaged model.

That means a car with a previous damage title will have a much lower cash value if a circumstance dictates the insurance company replace it.

There is no way to insure a car with a salvage title. Once the major repairs are made, and the title is changed to previous damage or rebuilt, some insurance companies will allow you to purchase liability auto insurance coverage.

Check out this table that shows you the average cost of liability insurance by state. This will give you an idea of the cost of coverage. Use the box below to search for your state.

Average Annual Auto Insurance Rate for Liability Coverage by State

Liability-only car insurance averages about $43 a month. Most insurers won’t sell you more than the basic liability insurance since the risk is too great.

Read our guide to learn more about liability insurance and what it covers.

Liability coverage is pretty inexpensive, but there are things you won’t be covered for, like damage to your car if you cause an accident.

Should I stay away from a car with a previous damage title?

Is a salvage title bad?

This depends a lot on the type of car and the repairs that have been done. Some cars with a lot of damage may not be able to be repaired to the point where they are similar to when they were new, but others may be fixed well enough.

When looking to buy a vehicle with a previous damage title, it is important to try to find out what the damage was and what parts of the car or truck were affected by the damage.

For example, if the damage was to the entire rear part of the vehicle and the entire rear was replaced and repaired, it may be safe to purchase that vehicle.

However, if the damage was not completely fixed or addressed by repairs, you may choose not to move ahead with purchasing the salvaged vehicle.

Can a previous damage title or salvage title ever be replaced with a standard one?

Either title will serve the purpose of making sure all subsequent owners of a vehicle are aware of any previous damage. Therefore, it is not possible to have either replaced with standard ones at any point in the future.

Some unethical sellers will move the salvage title vehicle from state to state to try to get a clean title, so they don’t have to disclose the damage. This is called title washing and is illegal. Always run a report before buying a car to check for any damages.

This is one of the reasons that rebuilt title cars are usually not restored. One exception to this rule is an undamaged car that might be found at a salvage yard simply because of its age.

For example, if muscle cars are wrecked but repairable, they can be stripped down and restored if they’re in good condition. Such cars can be given a clean title as long as they haven’t sustained significant damage.

Regulations regarding these types of situations are different from state to state, so it’s best to check with your motor vehicle department for specific details.

Although previous damage and salvage titles may seem to be a hassle, they are intended as protection for car buyers. Salvage title cars will generally require a larger financial investment.

Understanding what a salvage title means is important when deciding whether or not a salvage title vehicle is right for you.

Need to buy salvage title car insurance? If you’ve purchased a previously damaged car, you can compare salvage title car insurance rates online by entering your ZIP now.

Case Studies: Differences Between Previous Damage Titles and Salvage Titles

Case Study 1: The Smith Family’s Previous Damage Title

The Smith family purchased a used car from a reputable dealership. However, during the ownership transfer process, they discovered that the vehicle had a previous damage title. This title indicated that the car had sustained significant damage in the past, but it had been repaired and deemed roadworthy. Despite the repairs, the Smith family faced challenges when seeking insurance coverage for the vehicle.

Many insurance companies were hesitant to provide full coverage or charged higher premiums due to the previous damage title. Eventually, the Smiths found an insurance company, AutoSure, that specialized in providing coverage for vehicles with previous damage titles. AutoSure understood the nature of such titles and offered competitive rates tailored to the specific risks associated with these vehicles.

Case Study 2: The Johnsons’ Salvage Title

The Johnson family’s car was involved in a severe accident that left it heavily damaged. The insurance company declared the vehicle a total loss and issued a salvage title. A salvage title indicates that the vehicle’s repairs would cost more than a certain percentage of its market value, making it uneconomical to repair. The Johnsons decided to keep the salvage-titled car and repair it themselves.

However, they encountered obstacles when trying to obtain insurance coverage. Most traditional insurance companies declined to cover the vehicle due to its salvage title. After extensive research, the Johnsons found a specialized insurer, SecureDrive Insurance, that offered coverage specifically for vehicles with salvage titles.

SecureDrive understood the unique risks associated with salvage-titled vehicles and provided a policy that met the Johnsons’ needs.

Case Study 3: The Andersons’ Rebuilt Title

The Anderson family’s car was involved in a minor accident that resulted in moderate damage. After the repairs were completed, the vehicle underwent an inspection, and the state’s Department of Motor Vehicles issued a rebuilt title. A rebuilt title signifies that the vehicle had previously been declared salvage but has since been repaired and passed a thorough inspection to meet roadworthy standards.

When the Andersons sought insurance coverage for their rebuilt-titled car, they faced challenges similar to those encountered with salvage titles. Many mainstream insurers were reluctant to provide coverage or offered it at inflated premiums. Eventually, the Andersons found a reputable insurer, SureShield Insurance, that specialized in providing coverage for rebuilt-titled vehicles.

SureShield recognized the safety and reliability of properly repaired rebuilt-titled cars and offered comprehensive coverage at competitive rates.