• Buying Guides

What is a Blue Title?

By Autolist Editorial | July 14, 2021

The term "blue title" usually refers to the title of a salvage vehicle.

Generally, the term comes from the fact that the paper the salvage title is printed on is blue while a clear title is on green paper.

However, in some states, a blue title is a clear or clean title. Texas titles issued by the Texas Department of Motor Vehicles are printed on blue paper only if they are clear and unencumbered by liens. In some states, the paper a salvage title is printed on is pink. Car titles printed on orange paper usually indicate a vehicle was a salvage title vehicle that was rebuilt and approved by a state agency for resale.

If you're unsure what the color of the title means in your state, check with the local DMV or vehicle registry department. But also look at this list that likely will answer your questions.

Certificates of Title

A blue title in most states indicates the titled vehicle has a clear title. A clear title verifies that the car in question has never been declared a total loss by an insurance company in a major accident, fire, or flood to the point where it was declared inoperable. An insurance company might sell totaled cars if they qualify as such. They can then reassign the title to the person who buys the car.

A non-repairable title is usually orange. The owner must obtain this title on any vehicle that has been damaged or burned to such an extent that it's only worth as scrap or sold for parts.

In some states, a purple title indicates a salvage title car. Depending on the state, a salvage title can suggest that:

  • The vehicle has damage or is missing parts that would cost more to replace or repair than the car is currently worth.

  • The vehicle comes from out of state with a salvage title that indicates accident damage, flood damage, inoperable, or something similar.

  • The vehicle is not an out-of-state vehicle with a rebuilt title or a car that an insurance company has paid to repair hail damage or theft.

What is a Blue Title or Salvage Title, and How Do You Clear It?

As we mentioned, in most states, a 'blue title' is a vehicle with a salvage title; an insurance company or state agency has determined that the car has been declared a total loss and that it would cost more to repair the vehicle than it is worth.

That doesn't necessarily mean that the vehicle actually can't be repaired, but that the insurance company deems it costs more to fix the car with new parts than its value. However, as long as it's branded as salvage, it cannot be insured or legally allowed to drive on the road in many states. You're also unlikely to find any banks willing to finance such a car.

It's important to note that a salvaged title may also be called a branded title in some areas. Branded titles can be issued for various reasons beyond salvage issues, including when cars are returned under lemon law protection and instances where a car's odometer has been manipulated or "rolled back" to indicate fewer miles than it has.

In short, a salvage title can't be completely cleared. What you can do is to get the title re-branded as 'rebuilt,' which means that it's legally allowed back on the road and that it can be insured.

After buying the salvage-titled vehicle, follow these steps:

  • Repair the vehicle, fixing whatever's wrong that caused it to be declared totaled

  • Get an inspection through whatever official avenues your state requires

  • Complete final paperwork and submit it to the DMV or similar agency

If everything works out, the DMV will issue a new title that is labeled rebuilt. Keep in mind, however, is that potential buyers and insurance companies alike know that a rebuilt title means that the vehicle was formerly salvaged. Because of this, the formerly salvaged and now-rebuilt car is worth far less than a comparable vehicle with a clear title.

Some insurance companies might take issue with insuring a vehicle that has had severe and prior damage that they believe could negatively affect the vehicle's safety in the future, even though it has passed your respective state's inspection process.

Also, if your vehicle was declared a total loss in another state, you might have to get it inspected and approved in that state first before your state will let you register it there.

Top Things to Remember When Considering a Salvage Vehicle

There are several issues with buying a salvage vehicle, some that still apply even after it has been rebuilt.

The first issue is financing. You will almost always need to have cash upfront to purchase a salvage vehicle. Lenders are usually leery of financing a salvage vehicle because its real value debatable.

The next issue is with car insurance companies. They may raise rates on these vehicles through doubts that they are roadworthy or safe in the event of a crash. They may also reduce claim amounts if the car is in an accident, saying that the vehicle incurred more damage than usual because of its prior damage. Different states have different requirements for salvage cars on the road.

Resale value is another problem as buyers are leery of salvage and rebuilt title vehicles. Many believe they are not as safe as clean-titled vehicles, are wary of their low resale value, or misunderstand what a salvage title means entirely. Pricing on salvaged cars is generally well below Kelley Blue Book or market value.

Are There Laws Preventing Use of a Salvage Car as a Project?

If you're planning to rebuild a salvage car, you must prove that to your state's DMV. For example, you will need to show that your 2017 Honda submerged in floodwaters didn't only have the upholstery and carpet ripped out and replaced. You have to show proof that an authorized facility repaired all the salvage damage and that missing or damaged parts were replaced in the process.

In some cases, a salvage title can be issued for very minimal damage. For example, one car on a lot is flooded, and the insurance company assumed that all of them were damaged. However, there are titles where the damage leading to the salvage is indicated. Then the onus is on you to prove to both the state and the insurer that the car is roadworthy.

Is There Any Way to Get Fair Insurance on a Rebuilt Title?

Because insurance companies are rightfully suspicious of vehicles having hidden damage that will make them unsafe to drive or more easily damaged in an accident, getting insurance can be difficult at best.

You can mitigate their concerns by thoroughly repairing the vehicle to start and then having it inspected by an ASE-certified mechanic. Keep track of all repairs and take plenty of pictures. Have the car put through an emissions test and any other necessary tests depending on the state it will be registered in.

One of the biggest fears with rebuilt titles is frame damage. Make sure that your vehicle is repaired by someone qualified to make those types of repairs and that they thoroughly document the repair process.