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Salvage and Rebuilt Titles

The title brands a state applies to a vehicle an insurer has declared a total loss, what a rebuilt brand means, and the federal database built to stop a branded title being washed clean in another state.

Informational only - this is not legal advice. These definitions explain general legal vocabulary in plain English. They are not advice about your situation, reading them creates no attorney-client relationship, and the law differs from state to state and changes over time. For advice you can rely on, speak to a lawyer licensed in your state.

What it means

When an insurer pays a total-loss claim it usually takes the vehicle, and the state then issues a salvage title or brands the existing one. The threshold at which damage makes a vehicle salvage is set by each state, some by a percentage of pre-loss value and some by the insurer's own decision, which is why the same wreck can be salvage in one state and not another. A salvage-titled vehicle generally cannot be registered or driven on the road until it has been repaired and passed a state inspection, after which the state issues a rebuilt or reconstructed title. The rebuilt brand is permanent: it tells every later buyer that the vehicle was once written off.

Brands exist because a branded vehicle is worth less and may be less safe, and because the history is easy to hide. Title washing is the practice of moving a branded vehicle to a state whose rules do not carry the brand forward, obtaining a clean title there, and selling it on. Flood-damaged vehicles are the classic case. Federal law responded with the National Motor Vehicle Title Information System, to which states, insurers and salvage and junk yards must report, and which any buyer can query through an approved provider before purchase to see whether a vehicle has ever been reported as junk, salvage or a total loss anywhere in the country.

Whether a seller must disclose a brand is state law, and most states require it of dealers and many of private sellers; failing to disclose a known brand is usually actionable as fraud or under the state's consumer protection statute even where no specific disclosure statute applies. A lender may refuse to finance, and an insurer to fully insure, a rebuilt vehicle, and both are entitled to.

Where this comes from

Title branding, inspection and disclosure are state law and differ by state. The federal reporting system is the National Motor Vehicle Title Information System established by the Anti Car Theft Act of 1992, 49 U.S.C. §§ 30501-30505, with operating rules at 28 C.F.R. Part 25 requiring states, insurance carriers and junk and salvage yards to report and making the system available to prospective purchasers through approved providers. State disclosure requirements are found in each state's vehicle code and consumer protection statute.

When people hire a lawyer for this

A buyer who discovers a brand after purchase should gather the title, the bill of sale, any advertisement or listing and a system history report before contacting the seller, because whether the seller knew, and what they said, decides the claim. Before buying any used vehicle, and especially one priced below the market or coming from a region that recently flooded, a history check against the federal system and a look at the title itself for a brand are cheaper than any lawyer.

Find a lawyer for this in your state

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Part of the LawyerLand plain-English legal glossary. Definitions are written from primary sources - statutes and court rules - and each entry states the authority it rests on, or says plainly when the doctrine is state law with no national rule.

If you cannot afford a lawyer, civil legal aid programmes provide free help with many of these problems: civil legal aid programmes by state.

Related free reference tools: statute of limitations for a personal-injury claim, by state, quoted from each state's official text - part of LawyerLand's legal reference tools.