Car shopping is an expensive venture, so it’s not surprising if you’re looking for ways to save a buck. Some buyers will go as far as considering salvage vehicles to deepen the discounts.
Salvage title vehicles can cost significantly less than the average used car, and there can be some benefits to finding the perfect salvage vehicle. Before being blinded by the savings and diving head-first into the world of salvage title vehicles, it's best to have a firm grasp on what they are, how to make them legal for road use, and the pros and cons of buying one.
According to the Registrar of Imported Vehicles, a salvage vehicle has "been damaged beyond economical repair due to collision, natural disaster, accident, trespass or other occurrence as determined by a licensing authority or a licensed insurance provider." Some may also refer to this as a total loss.
When a car is deemed a salvage vehicle in Canada, it will receive a branded salvage title that stays with it until the owner restores it to a safe driving condition. Once it's safe to drive by provincial law, the owner can apply for a rebuilt title. This rebuilt title remains with the vehicle through its lifespan.
Even if a vehicle isn’t branded as rebuilt or salvage, it’s always a good idea to pull a Carfax report to ensure the car didn’t go through a title washing process. Title washing is when an owner transfers a vehicle through several provinces in an attempt to get the salvage or rebuilt branding dropped from the registration.
A vehicle may also be branded as “None,” meaning it may have been salvaged or rebuilt before the branding system was in place or the damage wasn’t significant enough to warrant branding — a Carfax report can help expose this too.
Buying salvage cars doesn't differ too much from purchasing any used car. Simply find the car you want, negotiate a deal with the seller, handle all the paperwork your province requires, and take the car home.
The big difference comes after the paperwork process, as you can't legally drive a salvage vehicle on Canadian roads, even if it's in drivable condition. Instead, you must tow the car to your home or a repair facility.
The driving ban will continue until you repair the vehicle, have it inspected for structural integrity, and rebrand the title per Canadian and provincial law. Rebranding the title is the process of changing the "salvage" brand on the title to "rebuilt."
There is one exception to buying and licensing a salvage or rebuilt vehicle: You can't license a salvage or rebuilt vehicle with flood-related damage in Canada. Also, if the title has a "non-repairable" brand, you can't have it rebranded as "rebuilt."
To legally drive a salvage car on Canadian roads, you must have the title rebranded as rebuilt. Canada has a nationwide Stolen and Wrecked Vehicles Monitoring Program (SWVMP) that standardizes salvage and rebuilt vehicle classifications.
The SWVMP also outlines nationwide requirements to clear a salvage title nationwide, which includes the following tasks.
When rebuilding the vehicle, the owner must retain full records of what components they used to rebuild the vehicle. This document may vary by province, but it’ll include at least the following information:
To satisfy this requirement, most provinces' vehicle registration offices will have a form the vehicle owner can pick up in the office or download to complete. An owner must provide a notarized copy of this document when taking a rebuilt vehicle for a safety inspection or transferring it to a new owner.
All salvage cars rebranded as rebuilt vehicles must go through structural integrity and VIN inspections.
A provincial-approved inspection station must complete the structural integrity and VIN inspections. The process may vary slightly by province, but it must include the following steps:
Upon completing the structural integrity inspection, the approved inspection station will complete a province-specific form indicating it complies with rebuilding standards. If the vehicle fails inspection, the owner must rectify the inadequate repairs and submit it for another inspection.
If the owner chooses to reinspect the vehicle at a different station, they must resubmit the entire rebuilding record and provide the new station the failed inspection report.
After the vehicle passes its structural integrity inspection, the owner can take the inspection form to their provincial licensing office to change the salvage branding to rebuilt. This rebranding enables the owner to license and insure the vehicle to operate it on Canadian roads legally.
Canada retains an Interprovincial Record Exchange (IRE) network, which allows any Canadian province to access the status of a vehicle brought from another province. This ensures the rebuilt brand remains on the title, even when registering it in a new province.
As mentioned, the SWVMP sets the minimum requirements for converting a salvage title to rebuilt. Some provinces have slightly different rules, which we’ve highlighted below.
Before starting any work, you must download Alberta's "Rebuilt Vehicle Work Plan," which serves as the rebuilding record. You’ll then need to contact an Alberta-licensed Salvage Vehicle Inspection Facility (SVIF) to determine when you'll need inspections completed during the reconditioning process.
Once you complete the repairs, take the vehicle to the SVIF for a final inspection. If the vehicle passes, you'll receive an Inspection Certificate. Take the Inspection Certificate to an Alberta registry agent within 14 days of the inspection to change the title branding from "salvage" to "rebuilt."
There are no variations from the standard SWVMP rules in British Columbia.
To clear a salvage title vehicle in Manitoba, you must contact a licensed body integrity inspection station to schedule an inspection and confirm what repairs and required inspections are needed to obtain a Body Inspection Integrity Certificate (BIIC).
Download and complete the Application for Rebuilt Vehicle Certification, which will act as the rebuilding record. Then complete the repairs and inspections as required by the body integrity inspection station to obtain the BIIC.
Tow the repaired vehicle to an approved inspection station. If it passes inspection, you’ll receive a Certificate of Inspection (COI). Complete the Transfer of Ownership Document (TOD) and bring the bill of sale, COI, and TOD to the Manitoba Public Insurance office nearest you to register the vehicle as "rebuilt."
Other than a safety inspection at a licensed inspection centre, New Brunswick follows all the basic SWVMP rules.
There are no variations from the standard SWVMP rules in Newfoundland and Labrador.
Nova Scotia has no variations to the standard SWVMP rules but recommends calling the Registry of Motor Vehicles (RMV) at 1-800-898-7668 for more information.
Ontario has no variations from the standard SWVMP rules, but it says only a Type 6 Motor Vehicle Inspection Station (MVIS) can perform the structural integrity inspection.
Prince Edward Island will require a safety inspection from a licensed inspection station after the structural integrity inspection, but it otherwise follows all the standard SWVMP rules.
Quebec follows all the basic SWVMP rules, except you must get a mechanical inspection certificate from a licensed inspection centre after passing the structural integrity inspection.
Saskatchewan follows all the basic SWVMP rules, except you must first complete an Application to Obtain Certification of a Rebuilt Vehicle, which you can get at a Saskatchewan Government Insurance (SGI) claim centre, salvage branches, and body integrity inspection stations. The vehicle will also require a mechanical inspection after completing the structural integrity inspection.
Bank financing is typically part of the car purchasing process. But buying a salvage title car often means purchasing a vehicle with diminished value, leading most lenders to shy away from offering a car loan.
A used car with a rebuilt title will have many of the same financing issues, though there may be some lenders willing to offer a car loan if the loan-to-value — the amount of the loan compared to the value of the vehicle — is low enough.
Some salvage cars are in such poor condition that they're good for nothing but parts. Others may appear to be in decent shape, especially those that are salvaged due to theft or mild vandalism. Even if they appear in good shape, there are some red flags to watch for when considering a salvage title vehicle.
Regardless of the vehicle's condition, Canada will not issue a rebuilt-branded title if it has flood damage. Check the title thoroughly for a record of flood damage as this means the vehicle is suitable for parts only.
Even if there's no evidence of flood damage on the title, inspect the car for telltale signs of flooding, including rust inside the headlight assemblies, mildewy or moldy floors, rusted floorboards, and damp carpet.
Frame damage is sometimes difficult to spot, especially on unibody vehicles where the body and frame are seemingly one complete piece. What looks like body damage may actually be frame damage in an insurance company's eyes.
A telltale sign of unibody damage is usually under the hood. If the sheet metal in the engine compartment has creases or large dents, this is a telltale sign of frame damage. You can also look at the floorboards under the vehicle. If the floorboards are creased or bent, this is another sign of hidden frame damage.
On a body-on-frame vehicle — one where the body sits atop a ladder-like frame — frame damage is easier to spot. Inspect the large squared tubes running the length of the vehicle’s underside and check for creases or other signs of significant damage. If you spot these defects, that’s a sure sign of frame damage.
Frame damage is among the most challenging and costly repairs on a vehicle. Chances are, if a car has frame damage it won't be cost-effective to rebuild it.
Airbags can deploy for a wide range of reasons, including low-speed crashes or even a computer glitch. Airbags are single-use safety items that can cost $200-$1,000 each to replace after deployment. Any vehicle with deployed airbags almost automatically gets a salvage title, regardless of its condition.
If the airbags are deployed on a salvage vehicle that’s in otherwise good shape, this is a red flag requiring more information. Check which airbags are deployed — most cars have six airbags, but some have 10 or more — and contact a trusted mechanic to get a quote on replacing them.
If you're planning to rebuild the vehicle, this quote will act as your baseline cost for getting the title rebranded. You may also need to replace the airbag sensors or even the vehicle's computer if a glitch caused an accidental deployment.
While the idea of buying a salvage vehicle may be a bit concerning, there are a few benefits to taking this route.
Salvage vehicles generally come with big discounts compared to vehicles with clean titles. You should evaluate all salvage title cars on a case-by-case basis. However, a good rule of thumb is that they're generally worth 20-40% less than a clean title vehicle, according to Kelly Blue Book.
If you have the mechanical know-how, no Canadian laws prevent you from completing the necessary repairs yourself on a salvage car. As long as you meet the paperwork requirements and pass the structural integrity inspection and all subsequent inspections, you can save money by doing your own repairs.
Saving money is the key to buying a salvage title vehicle and can be a big benefit, but there are loads of cons to consider.
Even if a damaged vehicle looks perfectly fine on the outside, there could be severe electrical or mechanical problems, especially in theft recovery vehicles. In some cases, these unknown damages can add up to costly repairs, negating the money you saved buying a salvage title vehicle.
Though there are specific guidelines to make a salvage vehicle eligible for a rebuilt title, the process is still subject to human error. You can follow the suggested repairs to the letter, but the structural integrity inspection could discover a new, previously unseen issue. Worse yet, if there's an incorrect or subpar repair, you'll need to repair the affected component again.
Salvage vehicles are challenging to get financed and they’re virtually impossible to get covered with car insurance. Even if you repair the car and get a rebuilt title, insurers are still wary of providing full-coverage insurance without a hefty price tag attached to it.
You may end up having to go with the basic liability insurance, meaning your vehicle isn't covered if you're at fault in a crash or it's a no-fault crash.
Even if you or your rebuilder repair the vehicle and get a rebuilt title, that doesn't mean the vehicle is back to normal. Issues like suspension wear, internal engine damage, and electronic and sensor faults can sometimes take months or years to manifest, leaving you with repair bills down the road.
Until you get it rebranded as rebuilt, a salvage title follows a car forever on its title and vehicle history report. Even then, the rebuilt branding remains forever, lowering its resale value and potentially making it difficult to sell or trade in.
Plus, some buyers simply refuse to buy a salvaged vehicle or one that's been rebuilt because of the uncertainty involved. This can significantly reduce your potential buyers’ pool, driving the car’s market value down further.
If you want a great-priced used car without the headache of buying a salvage car or rebuilt title vehicle, Clutch can help. We have a wide range of quality used cars at great prices, and we never sell a vehicle that's had a salvage title.
All online purchases come with a 90-day or 6,000-km warranty, so you can rest assured you're covered against any immediate issues that may crop up. You also have seven days to test drive the vehicle. If you don't like it, you can return or exchange the vehicle within that seven-day period.
Got a trade-in vehicle? We'll give you an initial estimate with our trade-in tool and follow up with a firm offer after you’ve submitted a handful of pictures. With our no-haggle pricing and available financing, you can finalize your used car deal without stress.
