One of the major hurdles owners of salvage car businesses in California face is getting the car registered with a fresh title and insurance for the salvage cars that have been repaired. Since it is especially difficult, many prospective customers of salvage cars get turned off. However, entrepreneurs operating salvage vehicle businesses should know how to get around the problem and advise their customers accordingly.
How Does a Vehicle Get a Salvage Title in California?
There can be a number of reasons why a car is written off by the insurance company; severe accidents, vandalism, natural disasters like floods, etc. are the most common. For older cars, the damage does not have to be even particularly severe; even a fender bender is enough for the insurance company to total it. Typically, insurance companies in California assign salvage titles to cars if the cost of repairs exceeds 80% of their value.
Stolen cars that are recovered after the insurance claims have been paid are also very attractive buys for salvage car dealers or individuals looking for a cheap vehicle; usually, these salvaged cars for sale are not seriously damaged and are worth quite a lot. Any car owner can convert his vehicle by making an application with the car documents and by paying a $50 fee in California. It is illegal to drive with salvage of cars titles on the California roads.
How to Revive a Salvage Car Title in California
After the insurance company decides to total a car, it turns the title over to the Department of Motor Vehicles. These are generally sold off in bulk to large dealers or auctioneers. These cars are then sold to smaller dealers who want to repair them and sell them off for a profit or sell off their parts and components or as scrap. Individual buyers may also buy them if they think they are repairable.
For salvage cars to be capable of being driven on California roads, the title has to be revived. An application together with the bill of sale from the junk car dealer along with a $50 fee has to be submitted to the DMV after it has been repaired. If the car passes the inspection, it will be certified roadworthy and the registration will be done once you pay the title fees. For cars that are manufactured after 1976, you will also need to pass the smog test and the brake and lights test to qualify for the registration.
While car insurance is mandatory for cars to be driven on California roads, it can be quite difficult to find an insurance company that is willing to cover a car that has been certified as salvage even though it has been subsequently found to be roadworthy by the DMV. This is because they think that the repairs will have compromised the safety and there will be more chances of a claim. Generally, you will need to work with insurance companies who are not averse to covering salvage cars, however, expect the premium to be higher than normal.