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Salvage Titles in Michigan

A Michigan salvage title is issued to a vehicle that has been labeled “distressed” by an insurance company following an accident or some other type of significant damage that renders a primary component of the vehicle to be worth less than a given percentage of the original cash value of the car. Michigan salvage title cars are determined solely by the insurance company and are given thedistinguishing color demarcation of orange on the title paperwork itself. Along with the orange coloring, the wrecked car title provides a list of the vehicle’s component parts that were deemed “non-salvageable.” If you are in the process of buying a car in Michigan from a private seller and you notice that the auto title is orange in color, you can be certain that this vehicle is labeled “salvage” and that you need to find out details about the car’s full damage history before committing to buy.

What Does aDamaged Car Title Mean in Michigan?

Once a car has been issued a Michigan salvage title, the vehicle must undergo a series of re-certifications via a specialized police official before it can be plated and retitled at the Secretary of State office in order to be considered roadworthy and legal to drive. A Michigan salvage title replaces the original title to the vehicle. If you are acquiring a damaged vehicle from an individual in Michigan, you must apply for a salvage auto title before you can legally transport or tow the vehicle. There is a unique form that must be filled out at the Secretary of State office in order to obtain the orange title.Historically, Michigan titling paperwork has referred to salvage title cars in several different official ways, such as:

  • Rebuilt—Prior to 1990
  • This vehicle was previously issued a salvage title—Between April 1990 to February 2005
  • Rebuilt Salvage—From March 2005 to the present

When evaluating smashed car titles, it can be helpful to know these different terminologies in order to accurately gauge the age and proper history of the car.

Michigan Auto Salvagefor Late-Model Cars

Michigan salvage title cars are not always older-model vehicles. A distressed late-model car can be acquired by a Michigan dealership and so long as the dealership obtains a resale salvage title for the vehicle within five days, the car can be legally sold off ofthe dealership lot just like any other. A “late-model” car inMichigan is defined as any vehicle thatis manufactured anytime in the last six model years and is under eight thousand pounds in weight, or any vehicle that is manufactured in the last sixteen model years and weighing eight thousand and one pounds or greater. If a Michigan dealership acquires a vehicle that is already titled as salvage, the dealership is not obligated to apply for the resale salvage title and can simply sell the vehicle outright as is.

It is the responsibility of the dealership to provide the prospective buyer with the salvage titleand to disclose to the purchaser the vehicle’s previous distressedstatus.If the totaled car is from out of state, the dealership must submit two separate forms, one of them listing the car’s specific damages, to the Secretary of State office in order toobtain a Michigan salvage car title in the dealership’s name and thereby to make the vehicle legal for resale in Michigan. All vehicles entering Michigan with a salvage indicator carry that title forward to Michigan salvage status, even if the original damage is less than set state standards for wrecked cars in Michigan. 

Older-Model Salvage Cars in Michigan

Older-model cars in Michigan bearing a damaged car title status operate under looser rules with regard to how the title is transferred or represented.A Michigan salvage or scrap title is not even necessary for an insurance company to obtain an older-model vehicle and successfully resell it; the insurance company will simply acquire the title from the insured and re-assign it upon the resale of the vehicle. Vehicles are deemed “older model” in Michigan if they are older than six model years in age and under eight thousand pounds in weight or older than sixteen model years in age and over eight thousand and one pounds in weight.

A unique aspect of older-model vehicles in Michigan is that they are only labeled “salvage” on a voluntary basis. Individuals selling older-model vehicles are not required to disclose or label a car as salvage and are often discouraged from doing so because this status on an older vehicledoes not carry the same meaning or expectations with regard to what the quality of the vehicle can be. As the recertification and plating of a vehicle that has been given a wrecked car title can be expensive and prolonged, these implications can often exceed the time or money buyers may feel the car is worth. For this reason and others, it is good policy to approach the purchase of older-model vehicles with an understanding that they may have an unstated and unseen history of damage.

Michigan Rebuilt Title Requirements

Once a car in Michigan has been labeled under a salvage vehicle title, the car must pass a strenuous series of inspections administered by trained police personnel in order to be deemed eligible for registration and road use again. The officialrebuilt title in Michigan will read “Rebuilt Salvage” and this simply documents that the vehicle was totaled by an insurance company at some point in the past. A recertification fee payable to the police agency that provides the inspection applies to all such rebuilt titles. The inspection process involves forms being filled out by both the presiding police professional as well as a certified mechanic whose primary purpose is to assert that the repairs done to the vehicle meet with industry standards for workmanship. In order to convert a Michigan salvage title to “rebuilt” status, the petitioner must bring the completed Application for Salvage Vehicle Inspection form, the Salvage Vehicle Recertification form utilized by the inspector and the original salvage title.

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