Significance

A salvage certificate is issued to an insurance company, when they declare a vehicle a total loss either due to collision or theft. In Illinois, this applies only to vehicles 8 years old or newer. The original title is returned to the secretary of state office. Each state has its own regulations governing salvage cars.

Misconceptions

If a vehicle has a salvage title, it can still be driven and insured in most states.

Considerations

Once a car has been issued a salvage certificate, only a licensed rebuilder can be issued a salvage title to the car. In some cases it must be inspected prior to issuance.

Effects

Once a car has a salvage title, its value is reduced by 20 percent to 50 percent of its fair market value, though cars salvaged because of a theft claim are devalued less than those from a collision claim.

Insurance

If your car has a salvage title, you can only insure the car for liability as opposed to collision, as the car has already been deemed a total loss by an insurer.

Warning

If you are buying a car, ask the owner for a look at the title. If it is a salvage title, it will have the designation "Rebuilt" or "S.V.," for salvage vehicle, on the face of the title. If a car purchased from a private owner has a salvage title, check the regulations in your state regarding titling the car, but do it before you buy. If you can't title it, you can't license or insure it. You will just be out the money.

Source:

Illinois salvage title regulations

Auto appraiser car value information