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Salvage Vehicles

Authored By: Iowa Legal Aid

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Most consumers should be careful about buying salvage vehicles, though for some it will fit their needs. In Iowa, a salvaged vehicle is one that has repair costs exceeding 70% of the vehicle's fair market value before it was damaged. Until July 1, 2021 it was 50% of the value. For example, if a vehicle was worth $10,000 before an accident and had damages that cost more than $7,000, it must carry a salvage title. Fair market value is based on the average retail value found in the National Automobile Dealers Association website. https://www.nada.com/  The cost of repairs includes labor, parts, materials and sales tax.

The State of Iowa will not give a salvaged vehicle a clean title, even if it's been repaired. However, it can be registered again and driven if you submit the salvage title and pay the registration fees to the county treasurer. The new title will be a "prior salvage" title and will remain so for the life of the vehicle. A peace officer will have to examine the vehicle to see if any of the parts used to repair it are stolen. These examinations cost $50. More information can be found at https://iowadot.gov/mvd/vehicleregistration/salvage  In order to schedule the exam, you will need to present an affidavit of salvage vehicle repairs and a bill of sales for all component parts replaced during the examination. You can find the affidavit at https://salvagetheft.iowadot.gov/SalvageThefTtitle If the vehicle passes, you will be given a salvage theft examination certificate.

Only a licensed recycler can repair salvaged vehicles. In general, licensed recyclers are those who rebuild and restore at least six wrecked vehicles in a calendar year. However, individuals are exempt from this licensing requirement if they repair wrecked cars as a hobby and not for profit.. Call the Iowa Department of Transportation if you have questions about whether you would qualify or be exempt from the recycler licensing requirements.

Before buying a salvage title vehicle you should be sure to have it inspected by a good mechanic. Even after the vehicle has been repaired there may be problems that can't be identified by looking at the vehicle's exterior. You should be especially careful about buying a used vehicle with an out-of-state title. Fraudulent auto dealers will sometimes transfer vehicles through other states with less restrictive laws in order to get a clean title for the vehicle. Get the facts about a vehicle's history before buying it.

Last Review and Update: May 12, 2021
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