Can you get full insurance on a salvage titled car?
Can you insure a car with a salvage title in California?
California car insurance laws require every vehicle on the roadways to be insured.. In 2006 they have even updated vehicle liability insurance laws to include that all insurance companies are required to report insurance status information to DMV for all private use vehicle and that law enforcement and court personnel now have access to DMV records to verify that your California registered vehicle is currently insured.
How to Get a Salvage Title Removed on a Vehicle
Before we begin, it's important to note that attempting to conceal a car’s history in a way that isn’t totally “by the book” in your particular state is a serious crime called title laundering. Every state’s auto licensing regulations are different and you should always check the unique registration requirements and titling rules of your state before considering a salvage title car. The rules are fairly similar in most jurisdictions, though, and they work something like this. Once a vehicle’s title has been branded as salvage, it will never go back to the way it was titled before.
If you want insurance on a salvage title car, be prepared to do some shopping. Few insurance companies are willing to provide insurance for a salvage title vehicle, and those that do are likely only to offer liability insurance rather than full comprehensive and collision coverage. One of the reasons this happens is because it’s difficult to determine the value of a salvage car, even if it’s rebuilt. A liability insurance policy protects you if you’re responsible for an accident, and many insurers are willing to provide this coverage because the type of car you’re driving doesn’t normally matter if you’re at fault in an accident. Collision and comprehensive coverage are much more difficult to find for salvage title vehicles. Insurance companies have a hard time placing a value on these rebuilt cars, and few insurers are willing to pay up if the vehicle is in an accident or needs repairs.
Can You Get Insurance for a Car with a Salvage Title?
However, most car insurance companies will not let you buy full coverage insurance for rebuilt salvage cars. The reason is simple: it’s difficult to assess all existing damage to a rebuilt salvage vehicle. On a standard vehicle that has never been in an accident, it’s easy to spot which damages were the result of a recent accident. On a rebuilt salvaged vehicle, it’s not as easy, which is why insurance companies don’t often provide collision coverage or comprehensive coverage.
Can You Get a Loan on a Salvage Title Auto?
If you are pre-approved for a loan, final approval normally will be contingent on getting a collision or comprehensive insurance policy. Because of insurers’ reluctance to pay for repairs on vehicles that have already been written off for extensive damage, most policies are written as liability only, and full coverage will be harder to get. If you already have auto or homeowner’s insurance, start your search by calling your agent to see if the company offers comprehensive insurance for salvage vehicles. Big auto insurance companies that can spread their risks over a wide range of insured vehicles also may consider writing a full coverage policy. These companies include Progressive, Geico and Allstate.
If you are considering buying a vehicle with a rebuilt or salvage title, learn how to insure a salvage title car first. Not all types of car insurance are always available. Financing a rebuilt-title car is already difficult, but any bank that does loan you money for a rebuilt-title car will require full-coverage insurance. Making a proper car insurance comparison will be difficult, because few are willing to write comprehensive and collision insurance on a car whose value is hard to pin down.
How can I figure out the value of a salvaged vehicle?
So one way you can try to determine the value of a salvage vehicle is to get a rough idea by looking up the worth of the model vehicle (with a clean title) in an automobile guide such as KBB or NADA and then take off 40 percent of the value. You may even want to take off 50% of the value since if an insurance company totals it out it is not uncommon that they will only pay out 50% of what the vehicle would be worth with a clean title (not salvaged).
Can I Finance a Salvage Title Car?
In the case of an honest-to-goodness salvage title vehicle, finding reasonable financing is going to be difficult, if not impossible. The truth is that most banks look at a salvage title as coming with very high risk -- And who can blame them? I mean, the vehicle was written off as a total loss by the insurance company for a reason, right? If one responsible company with a financial stake in the vehicle has already decided it is not worth investing in, chances are that another one will, too. When it comes to financing a salvaged car that has not been rebuilt, you may be out of luck with traditional lenders, though perhaps some of your relatives or friends may be willing to take a chance and loan you the needed funds.