How Do Cars Get Salvage Titles?


If you’re thinking of buying a salvage car from Salvagebid’s online auto auction, you should know how it got a salvage title. It’s important to understand how serious the damage is and whether a vehicle is repairable or not.

Usually, a car receives a  salvage title after it got into a collision or was damaged by a natural disaster. In this article, you’ll find the most common reasons why vehicles end up at a junkyard, and that’ll help you decide whether you should buy them or not. 

Road accident

This is the most common reason why vehicles get salvage title certificates and end up at a salvage car auction. After a vehicle gets into a collision and a claim is made, an insurance company will inspect the vehicle and decide if the repairs outweigh the market value of the vehicle. If the repair costs exceed the greater part of the vehicle’s pre-damage retail price, the insurance company deems it as a total loss and often will send it to a salvage yard. 

In different states, total loss calculations vary. Usually, the damage needs to exceed between 50-80 % of a car’s initial value, depending on the insurance company and the state. For example, in Nevada, a vehicle is deemed a total loss if repair costs exceed 65% of its retail value before the damage was incurred, and in New York repair costs should make up more than 75% of its pre-damage retail value. 

Natural disaster

Among all possible natural disasters, water damage is often the most problematic. In many cases, damage caused by water is not visible until one day you’ll find a slew of electrical and mechanical issues or hidden rust.

On Salvagebid, vehicles that have been damaged by water are listed under “Flood” as their damage type. They often look good and have an attractive price tag, however, we recommend being extremely careful with them, and conducting an inspection before buying them. 

Other natural disasters that can lead a car to a salvage yard are hail, hurricanes, and earthquakes. Though these disasters are experienced less frequently, they can turn a car into a bunch of junk in minutes. 


If a car is stolen, it will typically end up with a total loss claim. That means the owner and their insurance company should agree on the current value of your car. As soon a claim is filed for a stolen car, the owner loses any ownership rights to it. If the vehicle is found, the insurance company typically takes ownership and places it for sale at a salvage auction under the “Theft” title. 

Unsuccessful loan

If you have already looked through the list of salvage vehicles on Salvagebid, you might have seen cars in perfect condition titled “Repossession”. These cars are not actually salvaged and are often clear and drivable. They just were repossessed for non-payment from debtors and then sold on a salvage auction. 

Other reasons

  • A car can end up at a salvage yard after being leased or as a former rental.
  • Some cars with high mileage and light damage can fall under the Remarketing Division and be sold from a salvage auction.
  • Damage from an interior burn can be another reason for a car to get to a junkyard. It may be caused by a fuel system failure or electrical malfunction. 

Find your salvage car

Now you know why cars end up at salvage yards and are sold on online auto auctions. If you want to know more about vehicle salvage titles, we recommend reading this article. And if you have any questions about vehicles sold on, please contact our support office at

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