How to Insure a Salvage Title Vehicle in New York
You are in the market for a new car, and by “new car,” that's new to you, not straight-from-the-assembly-line new. What you hope to find is a half-way decent used vehicle to run chores in, something that you don’t mind if it has a few dents or dings since you intend to treat it a bit roughly anyway. In fact, as long as it works and gets you from point A to point B, you don’t care what this car has been through. Your biggest concern is the price. This is a car that you don’t want to spend much cash on. While you’re asking around for options, someone suggests that you look into purchasing a salvage title vehicle and your curiosity is piqued. If you’ve never heard of a salvage title vehicle, you’d never considered that as an option before, had you? The price sounds too good to be true.
Be forewarned, though. Buying a salvage title vehicle is fraught with potential problems, and one of the biggest is insurance. Finding an insurer willing to cover a salvage title vehicle can be tough, even in New York State. Unless the car is rebuilt from the ground up and passes numerous rounds of inspections, you won’t be able to legally drive it on the road. Unless you are very patient and a skilled auto mechanic (or know someone who is), buying a salvage title vehicle in hopes of saving some money is probably not worth it.
What a Salvage Title Vehicle Is
In New York State, the DMV requires that a vehicle be marked or branded as a salvage if: the vehicle is eight model years or newer, and; the owner has indicated that the vehicle was destroyed or received damage in the amount of 75% or more of its value at the time the damage occurred. This typically happens when a car has been in an accident and deemed (at least for insurance purposes) a total loss. But a car doesn’t have to be in an accident to receive a salvage brand. The damage may be caused by something else, such as hail or a flood. And if a car is stolen, paid off and later recovered, the insurance company can sell it as salvage.
The Salvage Brand
Follow closely because this may get a little complicated: Technically speaking, there is no such thing as a salvage title in New York. Instead, the title is branded as salvage. The difference is important if you want to insure your salvaged vehicle.
As long as your vehicle is branded as salvage, you cannot legally operate it on a New York road, nor can you have it insured for operation. To make your vehicle legal to operate you must have it inspected by the DMV. If it is determined to be in safe order, the DMV will issue you a new title with the term “REBUILT SALVAGE: NY.” Once this is done, you can register the vehicle and begin your search for insurance.
Insuring Your “REBUILT SALVAGE: NY” Car
As I mentioned above, insuring a salvage title vehicle can be difficult. The reason is that insurance companies are uncomfortable providing comprehensive or collision coverage for a car that has already suffered major damage. If you get into an accident and file a claim, how can your insurer be certain that they would not be paying out for damage that resulted from the original accident, the one that caused it to be a branded a salvage in the first place? The answer is: they can’t. That is why you may have a hard time finding an insurance company willing to write a comprehensive or collision policy on your salvage vehicle. And if they will write one, it will likely come with a very high premium, a very low payout, or both. You should have few problems, however, finding an insurer who will write you a liability policy. For many people, that is enough to make a salvage title car worth purchasing. If that describes you, then proceed as you would if you were looking to find an insurer for a “normal title” vehicle.
Inspect, inspect, inspect: Alright, maybe just one “inspect” is enough. If you decide to buy a salvaged vehicle, be very sure that you know what you are getting. If you are not an expert mechanic, have one take a close look at the vehicle for a clear understanding of the damage that is there and what it will cost to put it right.
Shop around: It’s always good to get plenty of quotes, even under normal circumstances. But this is especially important if you are insuring a salvage title vehicle. You will be surprised by the wide range of price quotes and coverage options presented. And remember, the more quotes you get, the more likely it is that you will find a bargain.
Inspect again: A second inspection by an expert mechanic, this one following repairs, may save you money on your insurance. If an insurer will write you a comprehensive or collision policy, it’s likely going to be expensive. You might be able to lower your premiums, however, if you can present the company with a clean bill of health from a certified mechanic. Just remember to check with your insurer first to see if a second inspection will make a difference.