You’ve probably heard the term “salvage title” before, but what exactly does it mean, and can you buy a bike with a salvage title?
In this brief article, we’ll tell you everything you need to know about motorcycle salvage titles.
What Does Salvage Title Mean for a Motorcycle?
An insurance company will total out a motorcycle and consider it a “total loss” when the cost to repair a damaged motorcycle will eat up a significant portion of its fair market value. Typically, the threshold is 75% to 90% of the value.
So, if a bike is worth $5,000, it might have sustained $3,750 or more in damages. The damage can be caused by a crash, flood, fire, vandalism, or something else. The cause of the damage is not relevant, only the resulting damage and the cost to fix it. Once the insurance company decides the repair costs are impractical, it will issue a salvage title.
How Insurance Companies Determine Repair Costs
The insurance company makes this determination based on the information it has available, and it determines the cost of repairs based on a database of national averages.
Are your spidey senses tingling yet? Note a couple of variables here:
1. The insurance company decides whether a bike is damaged beyond practical repair.
2. The insurance company evaluates the cost based on a model dependent on third-party data.
What this means is that there are a lot of variables that might not tell the full picture of whether a bike with a salvage title is worth the cost or risk. Making that decision requires a more careful look at the bike and then weighing the pros and cons of a salvage title.
Top 5 Things to Know About Motorcycle Salvage Title
From a practical standpoint, bikes with salvage titles become available on the open market when the insurance company gives the owner some money. Then they liquidate the bike to try to recoup some cost, usually via an auction.
You may end up at an auction looking at bikes with salvage titles, or you could be scrolling through Craigslist looking for a great deal on a bike from a private party. Regardless of where you’re shopping, here’s what you should know before pulling the trigger on a purchase.
1. You will get a great price on the bike. The market value of a motorcycle with a salvage title tends to be 20-40% lower than a vehicle with a clean title, though you could easily scoop up a bike at a 75% discount or more. Before making an offer, make sure you know what the value of the motorcycle would be with a clean title and negotiate from there.
2. Find out why the motorcycle has a salvage title. Get the VIN and enter it into a free or paid database. Knowing how the bike is damaged can help you decide whether it’s fixable or worth owning.
3. Even if you buy a bike with a “clean” title, there are no guarantees that the bike is in good condition. There are countless stories about people buying a “gently used” bike that the previous owner claimed was in perfect condition only to discover that the frame is bent.
4. You might have to jump through hoops to get it on the road. Before you can ride the bike legally on public roads, it has to undergo some testing, usually by the DMV or the local police department.
The tests vary but typically include ensuring that the bike can brake properly, has functioning turn signals, and the lights are operational. There could also be an inspection of the frame and emission requirements to ensure the bike doesn’t have higher emissions levels than what is acceptable by state law.
5. The salvage title might not be permanent. A salvage title is only permanent in some states, which is unfortunate because the title will follow the bike even it’s repaired to perfect condition. However, several states will allow you to get a clean or “rebuilt” title, so it’s worth checking your local laws to see if this option is available to you.
Ready to Hit the Open Road?
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