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The Differences Between Previous Damage Titles and Salvage Titles

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Here's what you need to know...
  • All motor vehicles in the United States are required to have some title documentation
  • If you’re buying a damaged car that’s had little or no repair work done to it, it will have a salvage title
  • When a salvage car is rebuilt to the extent that can be put back on the road, it is then given a previous damage title

What’s the difference between a previous damage title and a salvage title? 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 two titles, especially among average drivers who don’t normally deal with these kinds of cars.

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

Titles also contain information on possible lien holders; those who hold a financial interest in the vehicle due to providing a loan or other assistance towards its purchase.

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What kinds of cars receive salvage or previous damage titles?

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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.

It was less expensive for the insurance company to replace the vehicle than to have it repaired. Most commonly, this sort of extensive damage occurs during an accident.

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

When a salvage car is rebuilt to the extent that can be put back on the road, it is then given a previous damage title. In some states, these documents are known as “rebuilt” titles.

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

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 other 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 vehicle.

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

AdobeStock_53649099-1600x1600Both kinds of titles 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 these titles replaced with standard ones at any point in the future.

This is one of the reasons that rebuilt wrecks 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, an old muscle car can be stripped down and restored if it’s 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.

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

The question of insurance for salvaged or rebuilt cars is an important one. It’s impossible to carry a traditional insurance policy on a damaged car.

Because 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.

Although previous damage and salvage titles may seem to be a hassle, they are intended as protection for car buyers. Vehicles bearing such titles generally will require a larger financial investment. Knowing this ahead of time is important in deciding whether or not a previously damaged car is right for you.

If you’ve purchased a previously damaged car, you can compare car insurance rates online by entering your zip code below!

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