Which states allow you to keep a totaled car? Salvage title and insurance rules by state

What does it mean to keep a totaled car?

Keeping a totaled car means that you choose to keep your vehicle after your insurer declares it a total loss instead of giving it to the insurance company, which will sell it as salvage. When you keep a totaled vehicle, it will receive a salvage title, and your settlement will also be reduced to reflect the car’s reduced value.You’ll also need to complete repairs and often pass an inspection before it can be legally driven and insured again. See title considerations for a totaled vehicle for more on rebuild requirements.

What is an owner-retained salvage after a total loss?

An owner-retained salvage is a vehicle that the owner chooses to keep after an insurance company declares it a total loss, making it legally a salvage vehicle. A total loss means the cost to repair the car exceeds its actual cash valueActual Cash Value (ACV) is the current market value of your car, considering depreciation. It's the amount your insurance will pay if your car is totaled or stolen. (ACV) before the accident, or when the car's value falls below a threshold, such as 75% of its value. 

When a car is totaled, the insurer takes possession of it and sells it for its salvage value. You will receive a settlement based on the ACV minus your deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim.. However, if you choose to keep or “buy back” the vehicle after it’s declared a total loss, the insurance company will deduct the salvage value from your settlement.

How does keeping a totaled car work?

To keep a totaled car, you will first receive a settlement offer from the insurance company for the actual cash value minus your deductible, which you can choose not to accept. You’ll inform the insurance company that you want to keep the car, and it will issue a new settlement check for the actual cash value minus the salvage value and the deductible. You’ll be issued a salvage title.

While the process is relatively straightforward, steps may vary by state. In general, the process of keeping your totaled car includes:

• Insurance company declares the vehicle a total loss: Repair cost thresholds vary by state, but are usually 60%  to 100% of the vehicle’s value.
• Settlement offered: You will be offered a settlement of the vehicle’s actual cash value minus your deductible.
• You decide to keep the vehicle: You inform your insurance company that you are not accepting the settlement and want to keep your vehicle.
• New settlement offered: The insurance company offers a new settlement, deducting the vehicle's salvage value from the previously calculated amount.
• New titling: The state issues a salvage title, and you keep the vehicle.

Which states allow you to keep your car after a total loss? 

All states allow you to keep your vehicle after it's totaled by insurance, but rules and regulations for getting your car back on the road vary. In most states, you’ll need to document the repairs and pass a vehicle inspection to get a rebuilt title. However, the type of inspection and process varies significantly by state, and many states have additional registration restrictions.

This table shows what each state requires to get a rebuilt title after your insurer totals your vehicle.

Restrictions on the use or registration of a totaled vehicle

A totaled vehicle with a salvage title generally can’t be registered or legally driven until it meets state requirements, which may include an inspection before driving again or limiting its use until it is rebuilt, to address safety concerns and ensure legal compliance. 

Depending on the state, requirements may include:

• Require an inspection before driving it again
• Limit the vehicle’s use to off-road until it is rebuilt
• Don’t allow you to drive it until a rebuilt title is issued
• Don’t allow you to insure it until it is rebuilt

Insurance considerations when keeping a totaled car

If you keep a totaled car, your insurance settlement will be reduced by the car’s salvage value, and insuring it in the future will be challenging, similar to high-risk auto insurance. Most insurance companies will not offer full coverage insurance on a salvage vehicle. These limitations are important to consider when reviewing the pros and cons of keeping a totaled car.

Insurance considerations include:

• Reduced settlement payout: The insurer deducts the salvage value of the vehicle from your payout.
• Coverage limitations: Many insurers don’t offer comprehensive and collision coverage on salvage vehicles, and you may only be able to find a liability-only policy.

When does keeping a totaled car make sense?

It makes sense to keep a totaled car if you can repair it for less than the insurer thinks it's worth, the damage is cosmetic, the parts are worth more than the settlement, the vehicle holds sentimental value or is rare.

Reasons to keep a totaled car include:

• You can repair the vehicle yourself at a reduced cost 
• The damage that caused it to be totaled is cosmetic, such as hail damage
• The vehicle has sentimental value
• It’s a rare vehicle that isn’t easily replaced
• The part-out value is more than the salvage deduction

Title considerations for a totaled vehicle

A totaled vehicle is issued a salvage title and is subject to specific requirements for obtaining a rebuilt title to be registered and driven, which may include documentation of repairs, inspections and compliance with state registration rules.

Rebuilt title requirements vary by state,but include:

• Repair damages
• Document repairs, including material and labor costs
• Pass state inspection
• Apply for a rebuilt/restored title

See state-by-state factors that matter when keeping a totaled car for more.

Inspection & rebuild rules

Inspection requirements for salvage vehicles vary by state: some require rigorous checks to obtain a rebuilt title, while others have less stringent requirements.

For example, California requires brake and light inspections along with VIN verification by the California Highway Patrol, but in Hawaii, a rebuilt vehicle may only need an inspection and repair receipts.

“In Hawaii, a vehicle may receive a salvage designation when it has sustained significant damage and is considered uneconomical to repair. This can occur after a collision, flood, fire, or other major loss. Insurers evaluate the extent of damage and repair costs when determining whether a vehicle is a total loss,” said Jerry Bump, Hawaii’s Chief Deputy Insurance Commissioner.

“If an owner elects to retain a totaled vehicle, the vehicle owner should contact their local county Department of Motor Vehicles regarding requirements for registration and inspection.”

What is the impact of a salvage or branded title?

Impacts of having a salvage title include a lower resale value, reduced by up to 75%,  and difficulty with registration and finding full-coverage insurance.

You can expect a salvage title to result in:

• A permanent record of damage
• A resale value that is reduced by as much as 65%–75% of the pre-crash value
• Difficulty getting a full coverage insurance policy; most insurers will offer liability only

Before deciding to keep a totaled car, or buy one, it’s important to get a clear picture of the damage and the challenges of registering and insuring it, even after repair.

“Consumers considering the purchase or repair of a salvage or rebuilt vehicle should carefully review the vehicle’s history and obtain an independent mechanical inspection before purchase,” said Bump. “Even after repairs are completed, salvage and rebuilt vehicles may present safety, valuation, financing, or insurance considerations that consumers should fully understand before making a decision.”

State-by-state factors that matter when keeping a totaled car

State laws that affect keeping a totaled car include regulations on how you can keep a totaled car, how a salvage title is issued, and which inspections are required before the vehicle can legally return to the road, and total loss thresholds that impact how damaged a car must be to be declared a total loss.These thresholds may influence whether keeping the vehicle makes sense, so review the pros and cons of keeping a totaled car. These differences can also contribute to variations in car insurance rates by state. In a state with a lower threshold, such as 60% of the car’s pre-crash value, a car may be totaled but still have more value than in a state where a total loss is set at 100% of pre-crash value.

Total loss thresholds by state

Total loss thresholds determine at what point an insurer can declare a vehicle a total loss. These thresholds typically range from 60% to 100% of the vehicle's value. Some states use a Total Loss Formula, which is further defined in state law and may simply allow the insurer to decide or provide specific guidance.

Find your state below to see the total loss rules.

Pros and cons of keeping a totaled car

There may be benefits to keeping a totaled car, such as lower repair or replacement costs, but you’ll have fewer insurance options and a lower resale value. Carefully weigh the pros and cons before deciding if keeping a totaled car is worth it for you.

Pros

Reasons to keep a totaled car include:

• Lower replacement cost: Repair costs may be less than buying a new vehicle.
• Potential repair savings: You may be able to have repairs done at a lower cost than expected or perform them yourself.
• Parts resale opportunity: You may make more money selling vehicle parts than you lose in the insurance settlement for keeping the vehicle.

Cons

Cons of keeping a totaled car include: 

• Reduced insurance options: Many insurers won’t offer full coverage, or if they do, charge much higher rates.
• Lower resale value: Since a rebuilt title indicates that the vehicle was significantly damaged, you’ll get less money if you decide to sell the car in the future.
• Legal and inspection hurdles: Some states have strict inspection and titling requirements for rebuilt vehicles that must be met before the car can be legally driven. 

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