Junk Titles versus Salvage Titles: The Difference and What It Means for You

So, your cousin wants to give you their old “beater” vehicle because they are upgrading to a new car soon. You know the car has been through some stuff, but he’s a car guy and the car seems to have served him well. He brings the car over to your house with the title and the title says “salvage” on it. You ask him what that means, and he replies, “It means, it’s not junk.” You may roll your eyes, but when it comes to titling a car, your cousin has a point.

In Indiana, there are several circumstances requiring a vehicle to be designated as “salvaged” on the title. The most straightforward circumstance is when the vehicle was titled as salvaged in another state or jurisdiction. Indiana will honor that designation, which means when you register that vehicle with the Bureau of Motor Vehicles, the title for that car will say “salvaged” on it.

The other situations are less straightforward. First, the vehicle must be manufactured in the last seven years and then meet one of the following requirements:

• An insurance company determines that it is economically impractical to repair the wrecked, destroyed, or damaged vehicle and has settled with the insured or claimant;
• The vehicle has been designated as a “flood damaged vehicle”; or
• An owner acquired the vehicle that was “wrecked, destroyed, or damaged” and the cost to repair that vehicle is greater than seventy percent (70%) of the fair market value of the vehicle immediately before it was damaged.

A car that has been designated as “salvaged” is at that time, not roadworthy. However, the car may still be repaired and rebuilt. Once this is done, you can apply to the BMV to have the “salvage” designation changed to “rebuilt” and you’ll be able to drive your car on the road again.

“Junked” cars are another story. Junk cars can be used for parts or sold as scrap, but they cannot be titled. If a car has been designated “junk,” “dismantled,” “scrap,” “destroyed,” or any similar designation in Indiana, or in another state, you will not be able title that vehicle in Indiana.

If you’ve got questions about titling a car from outside of Indiana, or other personal property questions, call us at 317-825-5110 to talk to an experienced attorney who can help you navigate through the complexities of your case.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.