Salvage Vehicle Legislation

TARA actively supported HB 3588, effective September 1, 2003, which modifies the definition of nonrepairable and salvage vehicles and makes other changes to the regulation of salvage dealers.

Nonrepairable and Salvage Vehicles. The definition used to determine whether a motor vehicle is a nonrepairable or salvage motor vehicle is changed. The percentage of damage and year model of the motor vehicle is no longer used. The new definitions are:

"Salvage Motor Vehicle" means a motor vehicle that is:

• damaged to the extent that the cost of the repair exceeds the actual cash value of the motor vehicle immediately before the damage; or,
• damaged and comes into Texas under an out-of-state salvage motor vehicle certificate of title or similar out-of-state ownership document that states on its face "accident damage," "flood damage," "inoperable," "rebuildable," "salvageable," or similar notation; and,
• does not include an out-of-state motor vehicle with a "rebuilt," "prior salvage," "salvaged," or similar notation, a nonrepairable motor vehicle, or a motor vehicle for which an insurance company has paid a claim for the cost of repairing hail damage or theft, unless the vehicle was damaged during the theft and before recovery to the extent described above in the first point.

"Nonrepairable Motor Vehicle" is a motor vehicle that is:

• Damaged, wrecked, or burned to the extent that the only residual value of the vehicle is as a source of parts or scrap metal; or,
• Comes into this state under a title or other ownership document indicating that the vehicle in nonrepairable, junked, or for parts or dismantling only.

The names of the documents that will be issue by TxDOT on or after September 1, 2003 will change. "Salvage Certificate of Titles" changes to "Salvage Vehicle Title" and "Nonrepairable Certificate of Title" changes to "Nonrepairable Vehicle Title."

Fees. The application fee for a Nonrepairable or Salvage title is increased to $8, effective September 1, 2003. Applications with a postmark date prior to September 1, 2003 will be processed if submitted with the current $3 fee. An application with a postmark on or after September 1, 2003 will be rejected for the proper fee.

Salvage Certificates. A salvage (green) certificate will no longer be issued. A Salvage Certificate issued prior to September 1, 2003 will be treated as a Salvage Vehicle Title. A Salvage Vehicle Title will be issued instead of a Salvage Certificate for all Salvage Certificate applications processed on or after September 1, 2003.

Transferring a Nonrepairable or Salvage Vehicle. A person who acquires a nonrepairable or salvage motor vehicle, with certain exceptions, must apply for the appropriate document prior to selling or otherwise transferring the motor vehicle.

• Self-Insured Vehicle. The owner of a self-insured vehicle that is damaged to the extent that it becomes a nonrepairable or salvage motor vehicle and the owner has taken the vehicle out of normal operation, is required to apply for the appropriate title; i.e., either a Nonrepairable Vehicle Title or Salvage Vehicle Title, before selling or transferring the vehicle.
• Export Only Sales. A person who resides outside the U.S. may only buy a Texas nonrepairable or salvage motor vehicle from a salvage vehicle dealer or a governmental entity. A Nonrepairable or Salvage Vehicle Title must have been issued for the vehicle before it may be sold for export-only.
• Voluntary Applications. A person may voluntarily apply for a Nonrepairable or Salvage Vehicle Title. Once a Nonrepairable or Salvage Vehicle Title is issued, all restrictions and requirements, such as re-titling and sales restrictions, apply.
• Recording Liens. A lien may now be recorded on initial application for a Salvage Vehicle Title. The lien may be a new lien or an existing recorded lien may be carried forward to the Salvage Vehicle Title. Only an existing lien may be carried forward to a Nonrepairable Vehicle Title. A new lien may not be recorded.

DPS Inspection. A Department of Public Safety Salvage Inspection will no longer be required for rebuilt salvage vehicles.

Rebuilt Salvage Vehicle. An applicant for a "blue" Rebuilt Salvage Title is required to pay a $65 Rebuilt Salvage Fee in addition to the title application fee and other required fees. A vehicle on a Nonrepairable Vehicle Title issued on or after September 1, 2003 may not be rebuilt, retitled or operated on the public highways. At the time of application for a Rebuilt Salvage title, a completed Form VTR-61, Rebuilt Affidavit, is required instead of Form MVT-9, DPS Certification of Inspection.

Sale Restrictions.

• A licensed salvage vehicle dealer, including a salvage pool operator, and insurance companies, may sell up to 5 nonrepairable or salvage motor vehicles for which a Nonrepairable Vehicle Title, a Salvage Vehicle Title, or a comparable out-of-state salvage ownership document has been issued to an unlicensed buyer in a "casual sale."
• An insurance company or salvage pool operator may only conduct casual sales at auction.
• If the casual buyer repairs, rebuilds, reconstructs, or sells three or more nonrepairable or salvage motor vehicles in a calendar year, the buyer must be licensed as a salvage vehicle dealer.

Salvage Vehicle Dealer is a person engaged in this state in the business of acquiring, selling, dismantling, repairing, rebuilding, reconstructing, or otherwise dealing in nonrepairable motor vehicles, salvage motor vehicles, or used parts. The term does not include a person who casually repairs, rebuilds, or reconstructs fewer than 3 salvage motor vehicles in the same calendar year.