![]() From the insurance company's standpoint, the risk is that an accident could be caused by a preexisting defect of the vehicle and any damaged parties would potentially claim that the car should have never been allowed to return to public roads. However, the insurance company may choose to prevent the car from ever being used on a public road to eliminate the risk of it being involved in a traffic accident sometime in the future. Some vehicles that have a certificate of destruction may seem to be in good condition for public road use. Situations in which a vehicle with an issued certificate of destruction would receive a valid title are highly unlikely. What Is a Certificate of Destruction?Ĭ confirms that when an insurance company pays the claim for a damaged vehicle and becomes the rightful owner, it has the legal right to issue a certificate of destruction, meaning the vehicle will never be registered for use on a public road again and is scheduled for destruction. When the cost of repair is higher than the vehicle's value, a dismantled title is needed to sell the car's remaining valuable parts.Īny attempt to change or hide a car's designated title is against the law and is known as “title laundering.” This is meant to discourage car sellers who might want to sell damaged cars for more than they are currently worth. Dismantled title: According to, a dismantled title is similar to a salvage title and is given to cars that have been damaged beyond the point where repairing them would make financial sense.A competent mechanic can usually determine if a rollback has occurred. Odometer rollback title: This title is given to a vehicle that has had its odometer secretly and illegally turned back so that it will report less mileage than the car actually has.Even if you don't live near areas where these things happen, having your vehicle inspected for water damage is a good idea. Water damage title: This title is issued to vehicles that have sustained significant damage from water, perhaps as a result of thunderstorms, flash floods, hurricanes, or other similar weather phenomena.The vehicle is legal for use on public roads if it passes a safety inspection. As with the reconstructed title, it is issued by the insurance company or the place where the rebuilding took place, such as a collision center, body shop, or licensed vehicle rebuilder. ![]() Rebuilt title: This is similar to a reconstructed title and is for vehicles that have been significantly rebuilt.Affidavit title: This title is given under an affidavit in situations where the car documents are missing.After being inspected and deemed safe for public roads, a reconstructed vehicle can be registered for normal use. It is issued by the insurance company or the place where the repair or transformation was done, such as a collision center, body shop, or licensed vehicle rebuilder. Reconstructed title: This is for cars that have gone through significant repairs or transformations.A bonded title is valid for three to five years. This assures the owner they will be financially protected if any future ownership claims arise. Bonded title: This title is given to cars with missing ownership documents, with a security bond that is equal to the car's value being given to the new owner.In some states, junk titles are considered the same as salvage titles. Junk title: A junk title is given to cars that have been sold to junkyards and will be either sold for scrap metal or disassembled to be sold part by part.As long as they can pass a safety inspection, cars carrying this title are legal to drive. The salvage title is normally issued by the car's insurance company and could even be issued to cars with little or no deterioration. says that having a salvage title reduces a car's value, usually meaning it's no longer eligible for financing. An automobile is due to receive a salvage title if it loses more than 75% of its original value. Salvage title: This is issued to a car with a major value decrease as a result of a significant accident, subsequent repair, or theft.It is the most desirable car title, and in many cases, the only one that makes you eligible for a car loan. Clear title: This states that the vehicle has no outstanding financial burden of any kind that would prevent it from being sold.Throughout a car's lifetime, its title will be modified according to its condition. When a customer purchases a vehicle, the car title is transferred from the car dealership to the car's new owner. According to, a car title, also called a pink slip, is a document that is issued by the state that acts as a certificate of legal ownership.
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