What's the Difference Between a Salvage Title & a Rebuilt Title?

The title is one of the most important pieces of paperwork associated with vehicles of any kind. However, when a titled vehicle is involved in an accident that drastically affects its operation or appearance, the Department of Motor Vehicles (DMV) will often stamp the title with specific descriptions, such as damaged, junked or lemon. A salvaged or rebuilt designation on a title is a serious thing, and it is important to understand why the vehicle was designated as such.

Salvage Title

A vehicle that has been involved in an accident, a flood or a fire or that has been stolen can be classified under a salvage title. These occurrences often do enough damage to the vehicle that the insurance company decides it will cost more to fix it than replace it. The insurance company will usually sell the vehicle "as is" to a salvage and wreckage yard. Mechanics can sometimes purchase these vehicles and rebuild them until they are functioning properly.

Rebuilt Title

The DMV issues a rebuilt title to a vehicle that has previously been designated a salvage title but has been restored to good working order. The definition and laws regarding a rebuilt title can be different depending on state-specific regulations. In general, the complete rebuilding process must be documented with an affidavit and the vehicle must be inspected at a state-certified facility, before it can be issued a license plate and driven legally.

Differences

Salvage yards sell as-is vehicles.

The difference between a salvage title and a rebuilt title is whether or not a salvaged vehicle has been repaired by a mechanic to the point that the DMV will allow you to drive it legally on the road. A title will generally not be deemed rebuilt without it first having been salvaged. A vehicle with a salvage designation on the title will not be issued a valid license plate, and you cannot drive it.

Warning

The DMV does not change the status of a vehicle's title without reason. It is important to know what was wrong with the vehicle when it was salvaged, what was done to repair it and whether it has passed all inspections required by the state it will be registered and insured in. Inform insurance providers of the status of the title, because not all insurance policies or carriers will cover a vehicle with a rebuilt designation.