U.S. Vehicle Salvage Title
A salvaged titled vehicle is a vehicle that has sustained more than 70% of its pre-accident market value in damages, according to U.S. regulations. Exact percentages depend greatly on the insurance provider, as well as any applicable regulations and laws with the 70% estimated being calculated at the ‘retail’ repair rates, which could be triple the actual cost of a quality wholesale repair. Vehicles, under theft recovery, are allowed to be auctioned with little or no damage under the salvage title, or if in dispute between the insurance provider and the insured, after minor damage is sustained. This is applied if an insurance company must pay a total – loss claim on a vehicle, which it then sells later at an auction center. Total – loss insurance claims do not mean that the vehicle is a total, un-repairable write-off; in fact if the vehicle is kept by the owner using the buy-back option, the vehicle then retains a clean title once restored and certified safe to drive. Some vehicles due to age that receive cosmetic damage may still cost more to fix than the pre-accident market value. As there is no formula in the various states that tells when a vehicle is considered salvage; decisions are usually made on a individual case basis. After being involved in an accident, insurance companies usually offer the owner back their vehicle as an insurance buy back. If the owner exercises this option, the owner is responsible for the repairs and having the vehicle safety inspected through a state regulated facility or the highway patrol. After inspection, the car then is given a clean title, regardless of how much damage it received, due to the fact it was never owned by the insurance company, while some insurance companies require the title to be branded, it depends on the individual company. If the vehicle is not purchased in a buy-back it is then towed to the salvage auction where it is sold to a restorer or an auto recycler. The restorer can sell the car as it or fix it up and sell it as a rebuilt salvage titled car.
“Salvage” or “Junk” title only applies in the United States and Canada, while all vehicles imported or exported to or from other countries come with “clean” title, even when they have been involved and/or damaged in an accident.
Some U.S. companies like Autocheck sell title reports to prospective automobile purchasers that reveal these title statuses. Often the information could be incomplete as these companies cannot check accident reports in 23 states and because not all accidents are reported, particularly when there is nobody injured. ConsumerReports.org stated that vehicle history checks could produce ‘clean’ result even when the vehicle is being offered for sale as a damaged vehicle on websites such as http://easyexport.us, a site that specializes in advertising salvage cars for sale. Carfax, in 2007, settled a class-action, nationwide lawsuit and now includes prominent warnings that many of its reports may not be complete.
N.A.D.A., National Automobile Dealers Association, which outlines industry standards, Appraisal Guides, as well as the Blue Book Market Official Guide, and the International Society of Automotive Appraisers (I.S.A.A.) and other automotive businesses within the U.S. all place a devalued value on vehicles that possess a “Salvage Title” by 20 to 50 percent of their fair market retail price on the same vehicle without a “Salvage Title”. This percentage increases when the vehicle is a younger age and retail value when issued, while any car ten years or older only carries a maximum of 20% devaluation when compared to the fair market value of the vehicle. Once branded a “Salvage or Junk Title” ownership, it stays with the vehicle history even after the vehicle is branded with a ‘clean’ title in another state that is free of the “salvage or junk” title designation.