Selling a salvage car requires taking specific steps with the Alabama Department of Revenue (AL DOR). Your auto insurance carrier will also be involved in part of the salvage car process. We’ll tell you everything you need to know about selling a salvage car in Alabama.
The AL DOR defines a salvage vehicle as a vehicle that the auto insurance provider declares a total loss and has paid a monetary settlement as compensation or when a vehicle’s frame or engine is removed and not immediately replaced.
A total loss vehicle is a vehicle that has sustained damage that accounts for at least 75% of the car’s fair market value or actual cash value. Your auto insurance provider uses different compilations and databases to determine a car’s fair market value.
Your car’s actual cash value (ACV) is the fair market value of the vehicle. Your car’s value begins depreciating as soon as you drive it off the lot, which means the car is no longer worth what it was when you purchased it, whether it was purchased new or used. Even if you purchased your vehicle in new condition, and had the vehicle 1 month before the accident, the ACV will likely be less than the car’s sticker price.
In general, your vehicle’s ACV is essential when you’ve filed a claim with your auto insurance carrier, especially if it’s a total loss claim, and when you’re attempting to sell or trade-in your vehicle to a dealership or individual buyer.
Auto insurance providers will look at the replacement cost and make the appropriate deductions for the following:
- Normal wear and tear
Be advised that these deductions can vary by insurance provider, so speak with your auto insurance agent to learn the specifics.
The ACV of a vehicle is often confused with the replacement cost. The ACV is often less than the replacement cost. Most auto insurance carriers offer replacement cost coverage in the event of a total loss claim which provides the payment that is required to replace the vehicle if the car is declared a total loss.
Some auto insurance providers will pay you to replace the car with one that is a model year newer. Speak with your auto insurance agent for more information about replacement cost coverage.
If you’re not satisfied with the car’s ACV, you can negotiate it with your auto insurance company. You can negotiate your vehicle’s ACV in the following ways:
- Determine how your auto insurance carrier calculates the ACV (your auto insurance agent can explain it to you)
- Check the Kelley Blue Book (KBB) value (be honest about your vehicle’s condition)
- Research vehicles that are comparable to yours (when comparing, look at the condition of the vehicles and the prices. You may have to look at dealership and used car websites to compare vehicles.)
It is essential to communicate with your auto insurance carrier throughout the insurance claim process. Let your auto insurance company know you’re researching the ACV. It doesn’t hurt to be an active participant in this process.
When your vehicle is declared a total loss by your auto insurance carrier, you will accept a full or partial insurance settlement claim. Let’s discuss both types of insurance settlements.
In a full auto insurance settlement claim, your auto insurance carrier keeps the car and assumes full responsibility. You will be paid in full for the vehicle’s damage, and you can use these funds to purchase a vehicle of the same make and model.
A partial auto insurance settlement claim is what you will choose if you want to keep the total loss vehicle. In a partial settlement, your auto insurance carrier will pay for partial vehicle damages, and you can repair/rebuild the vehicle and apply for a rebuilt car title if the vehicle passes inspection.
Good question! Guaranteed Auto Protection (GAP) insurance is essential if you have a lease(s) or loans on your vehicle. GAP insurance covers the difference between the car’s ACV and the remaining amount of your lease or loan.
For example, if the car’s ACV can’t cover the cost of the loan, your GAP insurance will, which means you won’t be left with a vehicle you can’t drive but are still required to make payments on.
Alabama residents can only apply for a salvage car title if they own a vehicle that meets the AL DOR’s definition of a salvage vehicle. Per current Alabama law, AL DOR salvage certificates are reserved for damaged or destroyed vehicles that are paid off as total loss vehicles by an auto insurance carrier or another legal entity.
Generally speaking, these damages must exceed 74% of the car’s actual cash value without the damages. Alabama vehicles will also qualify for a salvage car title by uninsured or self-insured vehicle owners who have not secured the services of an auto insurance provider.
Sure! You can sell a salvage car in Alabama. However, the AL DOR requires you to disclose to buyers that you are selling a salvage car by printing it in the car’s description or document in a font that is no smaller than 10-point type. The disclosure must read as follows, “This vehicle’s title contains the designation salvage or rebuilt”.
Salvage title fraud is a crime that comes with hefty fines and penalties. However, this crime can be avoided. How? All you need to do is disclose that you are selling a salvage vehicle.
Remember that this disclosure must be printed in a font that is no smaller than 10 pt. So, when you post your vehicle’s description on Facebook Marketplace, Craigslist, or another selling platform, make sure this disclosure is visible. It’s a good idea to make the disclosure the first sentence of the description, and it wouldn’t hurt to put the disclosure in all capital letters.
A bill of sale is required to sell a salvage vehicle in Alabama. Many Alabama counties have a bill of sale they require, so check with your local DOR to see which form is required. A bill of sale is good to use because it can be used as a sale receipt for your salvaged vehicle. The bill of sale can also legally protect the seller if the buyer fails to register the vehicle or abandons it later.
Bill of sale requirements differ by county, so check with your county’s DOR branch for specifics. The following information must appear on your Alabama bill of sale:
- Names and complete addresses of the seller and buyer (must be a street address, P.O. boxes are not accepted). If the seller is a dealer, the name of the business must be listed.
- Date of sale
- Complete vehicle description, including:
- Series number
- Body type
- Vehicle identification number (VIN)
- Vehicle odometer reading at the time of sale
- Notarized signature of seller or authorized representative
Yes. In Alabama, salvaged vehicles are deemed unsafe to operate, so the vehicle must be rebuilt/repaired, and the owner must obtain a rebuilt car title before the car can be legally driven again. If you are selling your salvage vehicle, you must have a bill of sale, the car’s title, and an up-to-date registration card.
No. To sell your salvaged car in Alabama, you’ll need the car’s title and the up-to-date registration card. You are also required to disclose the car’s salvage condition.
Before we discuss how to get a salvage car title, you need to know that there’s a timeframe for applying for a salvage title, depending on who is applying. If you are the owner of the vehicle, and you’re applying for an Alabama salvage car title, you must do so within 72 hours after the vehicle is declared a total loss (salvage). Failure to apply for the salvage title will result in a criminal misdemeanor charge if convicted.
If your auto insurance carrier is keeping the vehicle, the auto insurance company is responsible for applying for the salvage title as soon as they receive the vehicle’s signed Certificate of Title or Origin.
To apply for a salvaged car title in Alabama, you must provide the following at your local AL DOR branch:
- A completed Application for Salvage Certificate of Title (Form MVT 41-1)
Make sure you read this form carefully. There are specific directions that explain how to proceed based on who is applying for the car title.
If the auto insurance carrier declared the vehicle a total loss and you were compensated, the auto insurance company must complete Section B and mark who is applying for the Alabama salvage title, whether you will apply, or they will apply. If the vehicle is uninsured or self-insured, you are required to complete Section A of the car title.
- Provide the car’s title (If you are transferring the car to your auto insurance carrier, you must properly sign the title over.)
- A lien release (required if a recorded lien on the title has been satisfied). This notice of release can be on the car title itself or a separate document. If there is an outstanding lien on the vehicle, the title will be mailed to the lienholder, even if you provide specific mailing instructions to have the car title mailed to you.
- Payment of $15 for the application fee (if you are paying by check, it must be made payable to the “Alabama Department of Revenue”.)
You will mail the required documents and payment to the following address:
Alabama Department of Revenue
Motor Vehicle Division
P.O. Box 327640
Montgomery, AL 36132
The Alabama salvaged title application provides a list of vehicles that are exempt from AL titles. If these vehicles currently have titles, they will remain in effect. However, these cars will NOT qualify for a salvage title if they are declared a total loss.
For instance, if you have a vehicle that is older than 35 years old, it is not eligible for a salvage title. Other examples in this scenario include certain manufactured homes, low-speed vehicles, and trailers. You can refer to the application for further details.
After you rebuild your vehicle, it’s time to have it inspected. Make sure you take the following items with you to the Alabama vehicle inspection:
- A completed:
- Application for an Inspection of a Salvage Vehicle and Affirmation Supporting Salvage Certificate (Form INV 26-15)
- Inspection Application Remittance Advice (Form INV 31-1)
- The original salvage car title (must be assigned to the owner)
- Bill of sale for the following:
- All major parts that were used to repair the car, as well as the vehicle identification number (VIN) of the original vehicle(s). These bills of sale MUST BE NOTARIZED.
- All minor parts that were used to repair the car. These bills of sale are not required to be notarized UNLESS the parts have a manufacturer vehicle identification number.
- Copies of the following:
- The current registration before receiving a salvage title
- Your state-issued driver identification
- Payment for the $90 fee, is broken down as follows:
- $75 for the inspection application
- $15 for the salvage title application (if you’ve already applied and paid for your salvage title, contact the AL DOR for further instructions.)
Mail the above documents and payment to the following address:
Alabama Department of Revenue
Titles & Vehicle Inspections
P.O. Box 327640
Montgomery, AL 36132
The AL DOR will inform you of when you can have the inspection completed. After your rebuilt vehicle passes inspection, you will receive a permanent, rebuilt identification plate and AL rebuilt car title.
In Alabama, you will be responsible for paying certain vehicle registration fees. The AL vehicle registration fees are based on vehicle type.
- Passenger cars and pickup trucks: $23 to $105
- Motorcycles: $15
- Buses (based on seating): $47.50 to $210
- Taxicabs (based on weight): $21 to $40
You have a few options when it comes to salvage yards in Alabama. We’ve listed a few of these salvage yard locations to give you a head start in the right direction.
Chad’s Salvage Yard
593 Blalock Rd.
Black, AL 36314
Monday – Friday (8 AM – 5 PM)
Saturday and Sunday (Closed)
Woodstock Auto Salvage
25498 Highway S.
Woodstock, AL 35188
Monday – Friday (8 AM – 5 PM)
Saturday (8 AM – 5 PM)
Hearns Salvage & Wrecker Company
655 Arley Byp.
Arley, AL 35541
Monday – Friday (7:30 AM – 5 PM)
Saturday and Sunday (Closed)
You won’t be able to obtain an auto insurance policy for your vehicle until you have a rebuilt car title. Once you have this title, you can get auto insurance. Remember that your car still has a salvage-branded title, so this means you will likely only be able to get Alabama’s minimum auto insurance coverage. The sooner you get the rebuilt title, the sooner you can apply for auto insurance.
You have a handful of selling options in Alabama. The selling method you choose should be based on what you want to do with the vehicle, and the effort and time you’re willing to set aside.
Selling your salvage car as-is, is the most logical option if you don’t want to put any time or effort into selling the vehicle. You’ll price your car appropriately and wait to receive offers. Once you sign over the car’s title, you’re free! You will no longer be associated with the car.
You can also sell your salvage vehicle to a salvage yard or junkyard. In this scenario, the company usually has a website you can use to schedule a pick-up time and date. You’ll be asked a few questions about the car, and you’ll need the VIN.
A tow truck driver will often inspect the vehicle and check the VIN to ensure they’re picking up the correct vehicle. If the information is correct, you’ll receive your funds. Some salvage yards and junkyards pay by check or cash. Make sure you’re aware of the payment method so you know what to expect.
A private sale is the most common way to sell a salvage vehicle. You will describe the vehicle and include photos of the car from all angles. Don’t forget to disclose that you are selling a salvage vehicle! Provide the car’s history and talk about how the vehicle was damaged. The more information you provide about the vehicle, the more likely you are to sell the vehicle.
Parting out your salvage vehicle is probably the most lucrative selling method. You will remove the parts of your car that are in demand. If you don’t know your way around a vehicle, no worries. You can hire a mechanic to help you.
Selling a salvage car can be frustrating, so it’s important to take your time and make sure you have the correct paperwork and signatures to avoid delays in this process. Although you may not want to disclose that you’re selling a salvage vehicle, it’s the law! You must disclose you are selling a salvage vehicle to avoid criminal charges and paying a variety of fees.
Make sure you are as detailed as possible in the car’s description and provide pictures of the car from all angles so buyers can see the damage and create a plan to restore the car. Honesty is the best policy in this scenario.
The time it takes to receive the rebuilt car title depends on you. The sooner you rebuild the car, the sooner it can be inspected. If your vehicle passes inspection, you can apply for your rebuilt car title. This process can take 10-15 days from start to finish, so plan accordingly.