Every state issues car titles to vehicle owners. Many choose to issue salvage titles, or rebuilt titles, to certain cars. A salvage title is typically issued to a car that the state thinks is not "road worthy" or where the damage to the car has rendered it a "total loss." Many times this is when the cost to repair the car is more than 75 percent of its value. The rules for salvaged cars differ from state to state and this has created a breeding ground for title fraud.
In some states, like Georgia, New Jersey, New York and Oregon a salvage title is issued if a car is stolen. In others, a salvage title can be issued to an older car at the owner's request. In some states, having a salvage titled car is advantageous because you cannot get a car insurance policy with full coverage. This saves potential car insurance policyholders money. However, this status is a downfall in other states, where you won't be able to get car insurance coverage at all. Luckily, once a salvage title is issued for a car, that vehicle can have its title converted back to a regular or clean title if it is repaired to the state's liking. In some states, if you have a salvage title, you will not be allowed to drive the car, while others will allow you on the road. It is best to check with your state DMV for clarification before you get behind the wheel or seek out car insurance.
Salvage titles go on a car's history, which anyone has access to via companies like CARFAX. Unfortunately, if a potential buyer of one of these vehicles does not read the car's history, they may not be aware they are buying a car with that's already been labeled as totaled. It is for this sort of reason to be aware of common salvage title scams. Some drivers will take a salvaged car to a state where the rules are not as strict and they get a clean title for the car. This way, when they sell it, the buyer will have no idea that it was wrecked.
Because the rules vary from state to state, when looking at buying a car it is imperative to check out the car's title in any way you can. When you find that title, examine it carefully. Many states will note things like "wrecked" or "totaled," but in a way that may not be obvious. In order to avoid being scammed, make sure you read it carefully.
A little know-how and a few extra minutes of reading a car's title can save you both money and a hassle. Get free car insurance quotes now to see how much you can save.