What makes a vehicle eligible for a salvage title?

A vehicle becomes eligible for a salvage title primarily when the repairs needed to restore it exceed its market value. This typically occurs in cases where the vehicle has been involved in a serious accident or has sustained significant damage due to other circumstances, such as flooding or theft recovery. Insurance companies often evaluate the vehicle’s market value to determine whether the cost to repair it justifies restoring it to operational condition. If the repair costs surpass the market value, the insurance company may declare it a total loss, leading to the issuance of a salvage title.

This designation serves as a record of the vehicle's history and indicates that it has been heavily damaged, outlining both the risks associated with purchasing such a vehicle and the potential challenges in securing insurance or financing for it in the future. This process helps protect future buyers from underestimating the condition of the vehicle and provides transparency regarding its past.